Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS (No. 2) BILL

Motion made, That the Bill be now read the Third time.

[Queen's Consent, on behalf of the Crown, signified.]

Question put and agreed to.

Bill accordingly read the Third time and passed.

WEST MIDLANDS COUNTY COUNCIL [Lords] (By Order)

Order read for resuming adjourned debate on Question proposed [28 June], That the Bill be now considered.

Debate further adjourned till Tuesday next.

Oral Answers to Questions — EDUCATION AND SCIENCE

16 to 18-year-olds (Awards)

Mr. Andrew F. Bennett: asked the Secretary of State for Education and Science if he will make a statement about provision of maintenance grants for 16 to 18-year-olds in full or part-time education.

The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): The Government have no plans to alter the position on 16 to 18-year-olds' awards, either by introducing a mandatory scheme for the age group, or by removing the present freedom of local education authorities to pay maintenance grants to pupils and students over compulsory school age, at their discretion and from their own resources.

Mr. Bennett: Is the Minister aware that a substantial number of young people

who gained good O-level results this summer left school to take dead-end jobs because they realised that it would cause too much financial difficulty for their parents if they stayed at school? What does the Minister intend to do to stop this waste of national resources and, in view of the economic climate being created by the Government, to encourage local authorities to make more grants available to pupils aged between 16 and 18?

Mr. Macfarlane: The hon. Gentleman's record on this subject has been consistent over the years, but we made clear in opposition that we were opposed to the pilot scheme proposed by the previous Government. As to the longer-term plans for improving awards for the 16 to 18 year-olds, we believe that the case for any change in the present arrangements will receive attention during the review of the relationships between the school, further education and training which the Government are undertaking against the backgrounds of our public expenditure policies. We announced in the summer that we would continue that review period. As soon as there is any announcement to make, I shall see that the House hears it.

Mr. Eastham: Is the Minister aware that in my city of Manchester we are pursuing our own endeavours to encourage young people to stay on for higher education and A-levels, but we have been informed by the Department of Education and Science that if maintenance allowances are made by my city part of the grant will be offset, thereby prejudicing the chances of those children taking advantage of the benefit and staying on at school? Would it not be more sensible if the Secretary of State spent £70 million on our own education system instead of on independent bursaries?

Mr. Macfarlane: The hon. Gentleman should know by now that the financial support for the assisted places scheme does not come from the cuts announced by the Government some weeks ago. When he refers to Manchester as his city, I think that he should realise that he is sharing it with a few more people than himself.
Manchester city council has announced its own mandatory awards scheme, but the simple fact is that the ratepayers of Manchester will have a good opportunity


to assess some time next year how effective and successful the scheme has been.

Expenditure

Mr. Skinner: asked the Secretary of State for Education and Science what representations he has received about the £4·3 million cuts in education expenditure by Derbyshire county council; and if he will make a statement.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): My right hon. and learned Friend has received no such representations. As the Government have made clear, it is for individual local authorities to decide, in the light of local circumstances, on priorities within and between services.

Mr. Skinner: I have no doubt that the Department will be receiving representations shortly. Is the Minister aware that on top of the massive cuts proposed by the county council there is a threat by the Government, together with the Tory-controlled county council, to do away with free transport for hundreds of thousands of schoolchildren outside the two or three-mile limits? Will the Minister guarantee that such a proposal will not be carried through by the Government? If it is good enough for Tory Ministers to travel free, it is good enough for the schoolchildren of Derbyshire and elsewhere to do so.

Dr. Boyson: The hon. Gentleman will know what is in the Education Bill within two or three days, when it is published. As to cuts in education expenditure in Derbyshire, the figure is not £4·3 million mentioned in the Question but £3 million, which is 2·5 per cent. or 1 per cent. less than the cuts announced in 1976 by the Labour Government for 1977–78.

Mr. Stoddart: If the Minister has not received any representations from Derbyshire, he must surely have heard that the Tory chairman of the Wiltshire county council—

Mr. Speaker: Order. The hon. Gentleman must put down a question on that subject.

Mr. Canavan: asked the Secretary of State for Education and Science whether he will make a statement about the effect

of the educational expenditure cuts on the universities.

The Secretary of State for Education and Science (Mr. Mark Carlisle): I expect to set grant for the new academic year at a level in real terms about 1 per cent. above that for 1978–79. I hope to be able to make an announcement about grant for the following year shortly.

Mr. Canavan: As the recently proposed cut of £100 million will inevitably mean cuts in the number of students, courses and staff in practically every university, can the right hon. and learned Gentleman give a guarantee that no university will be forced to close? Does he not realise that those who will suffer most from such a mean policy will be overseas students from the poorest countries, who will have to pay fees of £3,500 a year, thus making them the highest fees in the world?

Mr. Carlisle: The hon. Gentleman asked two questions. As to his first, we have still not announced our figures for 1980–81, although we shall shortly do so, but I do not believe that they will lead to the closure of any university. As to his second question, the fact is that in higher education today we have about 58,000 overseas students, whereas as recently as 1971 we had only 39,000.

Mr. Bowden: Is my right hon. and learned Friend aware that there is growing public anger at the misuse of public funds by those student union bodies which disrupt activities and behave like hooligans? Will he now take steps to remove that money and ensure that it is used more effectively?

Mr. Carlisle: I obviously regret any action that causes disruption of any kind, and from time to time I appear to be the butt of some of that action. I do not know whether that has any direct involvement in the spending of public money. As I said, our proposal for the universities is a 1 per cent. increase in real terms from what it was last year, and I hope that when the figures for 1980–81 are announced it will be found that we are keeping that at constant levels.

Mr. Gwilym Roberts: Does not the right hon. and learned Gentleman agree that the proportion of students who go


to British universities is still lamentably low compared with many of our industrial competitors? Does he not also agree that the views that he expressed earlier about the cuts are not shared by many vice-chancellors?

Mr. Carlisle: It is, of course, true that the percentage of those going on to our universities, although not necessarily to all forms of further education, is lower than in certain other countries. That I accept. As to the second part of the question, I repeat what I said earlier. I do not accept the wilder statements made about the effect of our reductions in expenditure in that area.

Mr. Stokes: Does not my right hon. and learned Friend agree that too many universities were created in this country after the war, and that we are now paying the penalty for that?

Mr. Carlisle: I think I am right in saying that the entry into universities this year is at its highest ever.

Mr. Winnick: asked the Secretary of State for Education and Science what representations he has received from teachers' unions regarding public expenditure cuts in the education service.

Mr. Mark Carlisle: I have met delegations from all the main teacher unions to discuss a range of issues, including public expenditure. I have also received many letters from individual branches of those unions.

Mr. Winnick: Does the Secretary of State appreciate that, with the widespread cuts and the jobs that will be lost in the education service, there has been much disappointment that, with all his liberal reputation and image, the right hon. and learned Gentleman has simply caved in to the Cabinet attack on the State schools and the standard of education in our country?

Mr. Carlisle: I am grateful for what I suppose was meant to be a compliment in the hon. Gentleman's question, but I do not accept his conclusion. We are planning for a 3 per cent. reduction in expenditure this year and a further 1 per cent. reduction in expenditure next year. I believe that that can be achieved without having the effect on standards of

education which the hon. Gentleman implied.

Mr. Chapman: So that the whole question of the so-called cuts can be put into a proper perspective, can my right hon. and learned Friend tell the House how much money his Department will be devoting this year to our education services, compared with last year?

Mr. Carlisle: I cannot do so without notice of the details. But I can tell my hon. Friend that in terms of overall expenditure we spend £8 billion on education, of which £6 billion goes through local education authorities, mainly on schools.

Mr. Kinnock: Will the right hon. and learned Gentleman check on his sums? Is he not aware that we are not talking about minuscule percentage cuts? When one considers the Government's refusal to take account of their responsibility to meet Clegg pay awards, the level of inflation, to which they have substantially subscribed, the cuts in rate support grant and the cash limits, one realises that the figure for education cuts, on 1978–79 estimates, is nearer 17 per cent., rather than the figure that the Secretary of State has given hitherto?

Mr. Carlisle: I am grateful that, according to the hon. Gentleman, our proposed cuts are, in his own word, "minuscule". I shall remember that, and I am grateful to him for saying it. As to his other comments, he is, with great respect, wrong. We have not reneged on any Clegg commission report. Indeed, the Clegg commission has not yet reported. As to inflation, the hon. Gentleman must surely realise that when we talk of expenditure cuts, or otherwise, in real terms, we take account of inflation in arriving at those figures.

Several Hon. Members: rose—

Mr. Speaker: Order. This question will arise later in another form.

Schools (Parental Choice)

Mr. Latham: asked the Secretary of State for Education and Science whether he will make a statement on his proposals for strengthening the legal rights of parents regarding the education of their children.

Dr. Boyson: The Education Bill which my right hon. and learned Friend will present to the House shortly will contain provisions to ensure that parents' wishes are taken into account in the choice of schools for their children, and that there is a local appeals system, and provide for parents to be represented on the governing bodies of their children's schools.

Mr. Latham: Is my hon. Friend aware of the great importance that many parents attach to being able to send their children to the school of their choice, especially if it is a traditional school outside their own catchment area? Will he bring forward the appeal procedures, which will be widely welcomed, as soon as possible.

Dr. Boyson: The Bill to be published shortly will contain proposals for parental choice, including the publication of results, what goes on in schools and how parents can apply for a certain school. There will also be an independent tribunal, whose decisions will be binding upon the local authority, to which parents can appeal if they do not get the school of their choice. I am sure that these proposals will be welcomed throughout the country by supporters of both major parties.

Mr. J. Enoch Powell: Will the proposed Bill apply, or in the usual way be applicable, to Northern Ireland? If not, may it be taken that the principle of the policy that is to be applied in the rest of the Kingdom will be applied in Northern Ireland?

Dr. Boyson: I do not think that this Bill will apply to Northern Ireland, but the principles that we hold within the Conservative Party will, in the long run, obviously influence legislation throughout the United Kingdom.

Mr. Beith: What value will these measures be to parents if the Bill establishes operating limits which local authorities can apply to schools, thereby declaring that they are full when they are not really full at all, if the same legislation takes away existing parental rights and if expenditure cuts lead to many small village schools being closed?

Dr. Boyson: The Bill will give full details of how these matters will be dealt with. The Bill contains requirements with

regard to local authorities which desire to reduce the intake into schools, and there is a right of appeal to the Secretary of State. Therefore, there is no power within the Bill for local authorities indiscriminately to reduce the size of schools against the wishes of people in the area.

Mr. Armstrong: Is it not time that the Minister was honest with the House and, indeed, with himself? Whatever we may build into any Act of Parliament about legal rights and other matters, the great mass of our children and their parents will have no choice at all about the schools they attend, and the hon. Gentleman had better direct his attention to improving standards in and the supply of resources to the State system. The only choice that will be left is to those who have the money to exercise that choice.

Dr. Boyson: I do not see that the question of money comes into the matter at all. This is a State system, and no fees are being charged. That may amuse Labour Members, but that is what happens. In answer to the point made by the right hon. Member for Durham, North-West (Mr. Armstrong), it is important to say that there is no means by which there is absolute choice of school for all children. In any form of society there is no absolute choice. If one then says that one does not want any choice at all and that this matter is all phoney and dishonest, that is fair enough. That is usually the view of Labour Members. It is the view of this side of the House that where we can extend choice, whether in owning houses, in schools or in other ways, it should be done. That is the great division between the two sides of the House.

School Meals and Milk

Mr. Gwilym Roberts: asked the Secretary of State for Education and Science if he will now make a statement on the future of school meals.

Mr. Hal Miller: asked the Secretary of State for Education and Science when he will relieve local education authorities of their obligations to provide school meals and school milk; and if he will make a statement on the latest annual cost of such provision.

Mr. Mark Carlisle: I shall be asking Parliament, in the Bill which I propose to introduce, to give local authorities greater flexibility over the provision of school meals and milk. Annual expenditure on these services in England and Wales is currently about £400 million and I expect the new measures to enable local education authorities to make substantial savings in 1980–81 and subsequent years.

Mr. Roberts: Will the right hon. and learned Gentleman come clean and admit that his proposals will make school meals either unobtainable or available only at a prohibitive price for the great bulk of working-class families? Does he accept that he is turning the clock back 50 years, so that we shall see again undernourished children in our schools?

Mr. Carlisle: I do not accept that. The purpose of the Bill is to give wide flexibility to local education authorities to decide the type of meal that they wish to provide and the charges that they wish to make. I have no doubt, from what we have heard, that most local authorities will continue to provide perhaps a different type of meal at a charge that will be within the pockets of the parents of the children.

Mr. Miller: Does my right hon. and learned Friend agree that it is high time that this £400 million was taken out of the education budget, where it does not belong? If there is a social service requirement for the provision of school meals and school milk to poor families, this should be dealt with in that way and under that heading. Education money should be devoted to education.

Mr. Carlisle: I accept what my hon. Friend says, that although this matter comes in the education budget it is not central to education needs. That is why, in looking for reductions in expenditure in education, I have examined areas such as school meals rather than the provision of education in the classroom itself. It is right, basically, that the school meals service, which started during the war, has become a social service provided by the Department of Education rather than by the Department of Health and Social Security.

Mr. Race: If the Secretary of State is so proud of these reductions in expenditure

in the financial year 1980–81, will he tell the House why he failed to consult any trade unions about the proposals being made by the Government? Is he aware that the last time the price of school meals was increased, in 1977, the numbers taking meals fell by 600,000, on a price increase of 10p a day? Is he aware that children in school playgrounds are now calling himself and the Prime Minister milk snatchers and meal stealers?

Mr. Carlisle: Let us deal with the question in the past decade. First, why have I not seen the unions? I have seen both the National Union of Public Employees—

Mr. Race: Afterwards.

Mr. Carlisle: —and the TUC on these matters. I have seen both the unions that requested to see me. I have also seen the local authorities. My colleagues have met some of the teacher associations. On the second part of the question, on reduced numbers, the hon. Gentleman might care to reflect that at the time the party that he supports took office in 1974 the price of a school meal was 12p. According to plans when they left office, the price had gone up to 30p. That was a 150 per cent. increase during the period in power of his Government.

Mr. William Shelton: Is my right hon. and learned Friend aware of the great disparity between administrative and food costs in school meals provision by local authorities, especially in the Inner London Education Authority, which seems to spend more on administration and less on food than most other local education authorities?

Mr. Carlisle: It is not only in inner London that this situation applies. The cost to the public of every school meal produced is 54p. Of that amount, the parent pays 30p and the taxpayer pays 24p. The value of the food in that meal, which cost 54p to produce, is only 16·58p.

School Standards

Mr. John Evans: asked the Secretary of State for Education and Science what steps he intends to take to improve the quality of primary and secondary education.

Mr. Michael Brown: asked the Secretary of State for Education and Science if he will make a statement about the Govenment's policy to raise standards in schools.

Dr. Boyson: An all-graduate entry to the teaching profession is being introduced. Action to promote higher educational standards will also be based on forthcoming reports on local authorities' curricular arrangements and Her Majesty's Inspectorate's national survey of secondary schools. Her Majesty's Inspectorate has recently published guidelines on primary mathematics following its national survey of primary schools. The first report from the assessment of performance unit, on mathematics performance by 11-year-olds, will be published in 1980, and other reports will follow.

Mr. Evans: Will reducing expenditure on education improve or reduce educational standards? Will reducing the number of textbooks available to children improve or deprive them of their educational standards?

Dr. Boyson: The share of the gross national product that has gone to education over the past 25 years has almost doubled, but I do not think that anyone can claim that schools' standards have doubled. Education standards depend upon the calibre of teacher intake, which we are improving, upon the curriculum that is taught, which we are examining, and how that is tested, which we are also looking into.

Mr. Brown: Will my hon. Friend give the House some indication of when we can expect Her Majesty's inspectors to play a much greater role in the Government's policy to increase education standards? Will he accept that it is vital that Her Majesty's inspectors once again play a central part in the Government's policy of ensuring rising standards?

Dr. Boyson: The inspectorate, in numbers, is lower than it has been for many years. This restricts the number of times that it can visit individual schools. But the number of reports that it has issued recently has been far in excess of previous years. A report on primary schools, another that is coming on secondary schools, and reports on mixed ability teaching and language

teaching leave no doubt in my mind that the inspectorate has helped to raise the level of achievement in schools.

Mrs. Ann Taylor: As the Minister believes that he will improve the quality of education in schools by promoting selection, can he say what co-ordination exists in his Department on policies for promoting selections and the cuts? Is he aware that one local authority that is giving children practice tests in the 11-plus examination has been obliged, because of the cuts, to use old papers containing questions in pounds, shillings and pence? As the children taking these tests were aged 3 when this country converted to decimal currency, what effect does the Minister consider that situation is having on their education? How can the Minister square that, and many other examples, with improvements in education standards?

Dr. Boyson: Selection is applied not only between schools but inside schools. Selection inside schools is part of the education debate. It has always been understood that it is advisable to have one or two trials before sitting an examination such as the 11-plus. What better way is there than to include history and mathematics at the same time? That, presumably, is what is known in schools as integrated study. Shillings and pence were abolished some time ago. We have had a Labour Government since then, and one can only wonder what happened during that period.

National Union of Teachers

Mr. Neubert: asked the Secretary of State for Education and Science when he expects to meet the general secretary of the National Union of Teachers.

Mr. Mark Carlisle: No date has been arranged for our next meeting.

Mr. Neubert: Has the NUT withdrawn its objection to the Professional Association of Teachers being represented on the Burnham committee? Apart from the PAT's numerical claim, has not its no-strike policy much to be said for it, especially when compared with the alarmist statements and disruptive action of the NUT?

Mr. Carlisle: Obvously I welcome the statement by a union that it does not


propose to take action to disrupt provision for children. The composition of the Burnham committee is a matter not for the NUT but for me. I have told the Professional Association of Teachers that I propose to review the position in September 1980.

Mr. Flannery: When the right hon. and learned Gentleman meets the general secretary of the NUT, who yesterday described him as abysmally ignorant and frighteningly complacent, will he discuss the dossier which shows that already the draconian cuts are having terrible effects on the fabric of State education, including nursery and adult education, education for the disadvantaged, in-service training and school buildings?

Mr. Carlisle: Of course I shall be willing to discuss the document which was sent to me today by Mr. Jarvis and the NUT. The hon. Member said that Mr. Jarvis had described me as being abysmally ignorant. I understand his reason was that I challenged his claim that I was presiding over the dismantling of the education system. When I received the document this morning I asked for one figure to be checked. I asked what a 70 per cent. cut in supply teachers would mean in Barnsley. When my office inquired, the Barnsley education authority said that no such decision had been taken and that it had no knowledge of such a proposal.

Mr. R. C. Mitchell: Will the Secretary of State now answer the question which my hon. Friend the Member for Newton (Mr. Evans) asked? Is he aware that there is a grave shortage of books in many schools? Is he aware that in my child's State school class one textbook has to be shared between four and that children cannot take home textbooks for homework? What is he going to do about that?

Mr. Carlisle: That is a fair question. There is a shortage of books. One of the troubles is that the price of textbooks has increased by far more than other items have in recent years. I am anxious to see that there is an adequate supply of textbooks in schools. For that reason, when examining reductions in Government expenditure generally, I have attempted to make education cuts in areas that do not affect what happens in the class room.

Assisted Places Scheme

Mr. Meacher: asked the Secretary of State for Education and Science when he expects to bring forward proposals on aid to assisted schools.

Dr. Boyson: I assume that the hon. Member is referring to the assisted places scheme, the establishment of which is provided for in the Education Bill which my right hon. and learned Friend will present to the House shortly.

Mr. Meacher: Is it not outrageous that the Government are going ahead with this wretched scheme to provide an extra £90 million for the tiny 5 per cent. elitist sector in education while making cuts of hundreds of millions of pounds which affect the other 95 per cent. of school children? How can the Minister pretend that this is not the most blatant discriminatory action to create two nations in our education system?

Dr. Boyson: This legislation is discriminatory. It discriminates in favour of poor children who cannot afford to go to such schools. I remind the Opposition that between 1974 and 1978 the percentage of blue collar workers' children who attended universities fell from 28 per cent. to 25 per cent. Practically everything done by the Labour Government since 1974 reduced education chances for working-class children.

Mr. Kinnock: Is the Minister aware that the undertaking given yesterday by the Secretary of State at the Assistant Masters and Mistresses Association conference that cuts will not be made in education expenditure to provide for the assisted places scheme holds mathematics teachers spellbound? There seems to be a new law in mathematics, that one can take hundreds of millions of pounds out of the State maintained sector and give scores of millions of pounds to the independent sector without there being a connection between the two. Does the Minister expect anybody to believe that nonsense? Does he think that it will be accepted by anyone involved in education administration, by trade unions, or even by public school headmasters?

Dr. Boyson: The money for the assisted places scheme is not drawn from the rest of the education system. The


scheme was a specific commitment in our manifesto. Many people in the Labour Party believe in fulfilling manifesto commitments. So do we. A means test will be operated. Therefore, the average cost of sending children to independent schools under the scheme will be approximately the same as the cost of sending them to a State secondary school. The scheme will, therefore, have little effect on the overall budget.

Mr. Robert Atkins: Do not questions such as that asked by the hon. Member for Oldham, West (Mr. Meacher) smack of dubious intent since he and some of his colleagues were educated at public schools? Is this not yet another example of "Do as I say, not as I do"?

Dr. Boyson: I am grateful for those comments. All the recent reports from the inspectorate indicate that there are problems in inner city schools and deprivation among the children there. We are going ahead with the scheme, with those children in particular in mind.

Expenditure

Mr. Ioan Evans: asked the Secretary of State for Education and Science if he will make a statement about the effect of public expenditure cuts on education.

Mr. Jim Marshall: asked the Secretary of State for Education and Science if he will make a statement on the effect of expenditure cuts on education standards.

Mr. Mark Carlisle: I have confined reductions in planned expenditure for 1980–81 as far as possible to those areas of my programme which do not form an essential part of the provision of education for young people. I do not anticipate any adverse effect on education standards.

Mr. Evans: Is the Secretary of State aware that that reply is not in keeping with the estimates made by local education authorities? Does he realise that the Mid-Glamorgan education authority estimates that a 5 per cent. reduction in resources will result in the closure of all adult education centres, three education centres, a reduction of 100 nursery school teachers and the closing of three library services? If the Secretary of State is

not going to battle in the Cabinet to ensure that the education service receives more resources, will he do the right thing and resign?

Mr. Carlisle: How a local authority chooses to reach its target of what will be a 4 per cent. reduction in present expenditure in any year is a matter for that authority. We, as a Government, have a duty to see that we, as a country, live within our means. We cannot do that without making reductions in the plans that we have inherited. Unfortunately, education has had to take its share of those reductions. I am satisfied that we have made them in a way that will not affect the standard of education.

Mr. Marshall: Will the Secretary of State please come clean and admit to the House, and the country, that the cuts in education expenditure will have, and will increasingly have, adverse effects on the standard of education? Will he admit this publicly instead of hiding behind a facade of pretence that these cuts will have no such effect?

Mr. Carlisle: We must keep this in proportion. The situation is that the Government have asked this year for a 3 per cent. reduction in expenditure, and a 5 per cent. reduction in what was planned expenditure for next year. That means spending £96 for every £100 spent last year. I do not accept particularly because of the freedom that I propose to allow over meals, milk and transport, that authorities cannot achieve that figure without having the effects that the hon. Member implies.

Mr. Nicholas Winterton: I fully support and endorse the views expressed by my right hon. and learned Friend. Is he aware of the recent inquiry undertaken in the North-West by the CBI into the activities of Cheshire county council? That inquiry found that for every 100 teachers at least 70 administrative and ancillary staff were employed. Will he encourage the CBI to undertake further such surveys and inquiries into other local authorities and county councils? Does he agree that this kind of inquiry and the public expenditure cuts which the Government are requesting could well produce a reduction in expenditure and an increase in standards in education?

Mr. Carlisle: I should welcome the CBI undertaking an inquiry into any other county of the kind that it undertook in the county which my hon. Friend and I represent. On his wider question, the proposals for 1980–81 envisaged, overall, no reduction in the pupil-teacher ratio, which is as good as it has ever been.

Mrs. Ann Taylor: Does the Secretary of State agree that those local authorities that are trying to save money by cutting down, or even abolishing, nursery education are making very short-sighted decisions? Does he agree that nursery education is a particularly important investment, and that its absence will put an even greater strain on primary schools? Will he include nursery education in the category of essential education that he mentioned his first answer?

Mr. Carlisle: Having said that I believe that local education authorities should be free to decide how they spend their moneys, I am not prepared to comment on the individual ways in which they choose to do it. Our plans for this year provide for an additional 4,000 places in nursery education. Our plans for 1980–81 provide for a further 2,000 places.

Mr. Fletcher-Cooke: Does my right hon. and learned Friend nevertheless agree that although he is leaving this to the local education authorities, quite rightly, he must use all his power and influence to see that school textbooks, which are central to education, are the least affected by these cuts? I add my plea to that of the hon. Member for Southampton, Itchen (Mr. Mitchell), that textbooks, which are the centre of our education system, should not suffer. If necessary, peripheral matters should.

Mr. Carlisle: I fully accepted the point made by my hon and learned Friend in the answer I gave to the hon. Member for Southampton, Itchen (Mr. Mitchell). Of course textbooks are important. I remind the House again that, in the end, we can spend only as much money on education as the country can afford. What we can spend and afford in the future depends upon our ability to expand the economy of this country, by leaving more money for the potential wealth-creating sectors.

Overseas Students

Mr. Christopher Price: asked the Secretary of State for Education and Science how many overseas students were in higher education over the past two years; and how many he expects to be there over the next two years.

Dr. Boyson: In higher education in Great Britain there were 57,600 overseas students in 1977–78 and about 58,400 in 1978–79. The planning numbers for expenditure purposes, continuing the policy of the previous Government of restricting the number of foreign students, were 46,000 in 1979–80 and 45,000 for 1980–81, but plans for 1980–81 are under review and an announcement will be made shortly.

Mr. Price: Is the Minister aware that this is all completely changed by the Government's recent announcement, whereby fees in British higher education will be the highest in the world? They will be double the size of those even in California. Is he aware that this policy, in the opinion of the vice-chancellors, will destroy many technological courses in our universities? There is a mix there, and if overseas students leave there will be no viable courses left for the home students. Does the final paragraph of the letter from his right hon. and learned Friend to the vice-chancellors yesterday mean that the Government will have second thoughts on this matter if the University Grants Committee gives as its considered opinion that this will decimate—not just reduce—the number of overseas students in Britain?

Dr. Boyson: There is a considerable number of American colleges where fees are at least equal to, if not higher than, those in this country. It is as well to remember that when, in 1977–78, there was an increase in fees by the previous Labour Government of between 40 per cent. and 105 per cent., there were 2,500 more foreign students in this country the following year than there were the year before. It is also as well to remember that one-quarter of the foreign students come from countries where the average income is higher than in this country and that many of them come from wealthy families. It is not a question of taking away from the poor of the world.

PRIME MINISTER (ENGAGEMENTS)

Mr. Canavan: asked the Prime Minister what are her official engagements for Tuesday 23 October.

The Prime Minister (Mrs. Margaret Thatcher): In addition to duties in this House I shall have meetings with ministerial colleagues and others. This evening I hope to have an audience of Her Majesty The Queen.

Mr. Canavan: Will the Prime Minister find time today to repeat her sister-bountiful speech—the first thing she has ever said with which I partly agree—because I, too, am thoroughly disgusted with her Government cutting expenditure on housing, health and education while dishing out £1 billion a year to the Common Market? Even if it means our getting out of the Common Market, will the Prime Minister take unilateral action, if necessary, to cut our contribution? Otherwise, she will end up like Old Mother Hubbard instead of sister bountiful.

The Prime Minister: I am glad to have pleased the hon. Gentleman with at least one of my speeches. As far as cutting our contribution unilaterally goes, we must observe the law, and I think that such a course would be outside the law. We shall try to negotiate these things at the Dublin summit but, believing in the rule of law as we do, we cannot go outside it. We must try to get change by agreement.

Mr. Kenneth Baker: Will my right hon. Friend today have another look at the speech made by President Brezhnev during the Summer Recess about the reduction of Soviet troops in Germany? Is she aware that if 20,000 Soviet troops were withdrawn from East Germany there would be 380,000 left, and that if 1,000 Russian tanks were withdrawn from East Germany there would be 6,000 Russian tanks left there? Therefore, was not her reaction in her speech to this recent rather token gesture of disarmament correct?

The Prime Minister: I wholly agree with my hon. Friend, and I am certain that the speech by President Brezhnev

must not divert us from modernising our theatre nuclear forces and from making a decision by the end of this year.

Mr. Leighton: I agree with the Prime Minister that we must obey the rule of law, but does not she agree that the rule of law of the United Kingdom is made in this place and that she has adequate powers to act unilaterally if she wishes?

The Prime Minister: The law of the United Kingdom is to observe the edicts of the European Court.

Mr. Renton: Anticipating many weasel words from the Opposition today, and in the months ahead, about the effect of stabilising public expenditure, may I ask whether the Prime Minister has had an estimate made of the extent to which income tax, VAT and rates would have to go up if all the Labour Party's pre-election promises were to be fulfilled and there were no public expenditure cuts?

The Prime Minister: The fact is that expenditure this year, on the same price basis as obtained under the previous Government last year, is slightly up. In 1978–79 the Labour Government spent £69,766 million. This year we plan to spend £69,796 million. Those figures are in the same real terms. Expenditure this year is therefore slightly up on last, which should give the lie to those who accuse us of savage cuts.

Mr. Straw: With reference to the answer which the Prime Minister gave to my hon. Friend the Member for Newham, North-East (Mr. Leighton), is she saying, on the question of the Common Market budget, that there are no circumstances in which, no matter how obdurate the French and their colleagues are on the matter of our contribution, she would bring forward amendments to the European Communities Act?

The Prime Minister: I advise the hon. Member to be a little more patient. We shall try to achieve what we want to by negotiation. I do not make threats to break the rule of law, either nationally or internationally, since we believe that we should have no future if we did.

FRASERBURCH AND PETERHEAD

Mr. McQuarrie: asked the Prime Minister if she will visit the fish processing factories in Fraserburgh and Peterhead.

The Prime Minister: I have at present no plans to do so.

Mr. McQuarrie: I very much regret that it is impossible for my right hon. Friend to visit the fish processing factories in my constituency. However, will she press her Ministers to hold a meeting with those responsible for fishing in order to secure a negotiated agreement for the industry and remove the threat of unemployment that hangs over thousands of people as a result of high costs and lack of supplies? Is she aware that the industry has been asking for that for four years without success and that during that time almost every sector of the industry has had to apply for temporary employment subsidy to remain in business?

The Prime Minister: I know the problems that my hon. Friend is facing in this area. The overriding necessity is to conserve herring stocks, and until they have recovered there will be very little supply for that branch of the fish processing industry. My hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food and my right hon. Friend the Secretary of State for Scotland will be discussing the problem with representatives of the industry this week.

Oral Answers to Questions — MINISTERIAL BROADCASTS

Mr. Freud: asked the Prime Minister what are her current criteria for making a ministerial broadcast.

The Prime Minister: There has been no change in the published criteria.

Mr. Freud: In view of the cuts, and rumoured cuts, in health, education and social services, and the proposed disappearance of foreign husbands from the hearths of English wives, does not the Prime Minister feel that it is about time she spelt out her programme for this parliamentary Session in a ministerial broadcast?

The Prime Minister: I think that the place to spell that out is in this House, and it will be spelt out each day. As

for the hon. Gentleman's comments about cuts in health and personal social services, last year the Labour Government spent—and these figures are corrected and are on the same price basis—£9,055 million on health and personal social services. This year the figure will be £9,109 million, which is an increase in real terms.

Mr. Adley: Will my right hon. Friend make as many ministerial broadcasts as possible so that we may all enjoy the sight of the Parliamentary Labour Party and the National Executive Committee of the Labour Party arguing about who replies?

The Prime Minister: I am not over much in favour of either ministerial or party political broadcasts. I think that people prefer to watch "Tinker Tailor Soldier Spy".

Mr. Norman Atkinson: Will the Prime Minister take the opportunity of a broadcast to reassure the British people that she did not mean what she said in her bellicose response to the Soviet initiatives in Europe? Is it not true that the Foreign Office is privately saying that when she shoots from the hip on these occasions she betrays an immaturity in international affairs? Will she now welcome the detente which it is possible for her to take up and accept on the next occasion?

The Prime Minister: I think that the complaint of the Soviet Union was that I shot with deadly accuracy.

Oral Answers to Questions — CBI

Mr. Latham: asked the Prime Minister when last she met the Confederation of British Industry.

The Prime Minister: On 9 July.

Mr. Latham: In view of some of the absurd wage claims that are apparently being lodged in the private and public sectors, will my right hon. Friend lose no opportunity to stress that excessive wage settlements will lead directly and inevitably to higher unemployment?

The Prime Minister: I entirely agree with my hon. Friend. If excessive wage claims lead to excessive wage settlements a number of people will price themselves out of the market and there will be


higher unemployment. The alternative is that they take more money themselves at the expense of others, because we shall not increase the money supply to accommodate higher wages.

Mr. James Callaghan: Is it still the Prime Minister's view that a combination of a strict monetary control and a wages free-for-all, whether or not it leads to absurd wage claims, will reduce inflation and unemployment?

The Prime Minister: The way to reduce inflation, as the right hon. Gentleman knows, must be not to print more money. If we print more money, if we increase the money supply, that will be next year's inflation. Within the money supply we expect management and employees to be able to negotiate responsibly, and if they do not they must bear the consequences of their own action.

Mr. Callaghan: Are we to take it from that, then, that the right hon. Lady intends to stick to a policy of strict monetary control, irrespective of the effect on unemployment?

The Prime Minister: The alternative is to print money—[HON. MEMBERS: "Answer."]—and to lead, as the right hon. Gentleman once said to his own party conference, to increased inflation and, thereby, to increased unemployment.

Mr. Callaghan: I am much obliged to the right hon. Lady for referring to my past speeches, but I wish that she would refer to her present policy. What is it?

The Prime Minister: Exactly as I have said. If we print money, that will lead to extra inflation and extra unemployment. Therefore, I can only urge people to realise that if they ask for pay settlements in excess of productivity they are leading either to extra inflation or to extra unemployment, and the extra unemployment would be their fault.

Mr. Speaker: Mr. David Steel.

Mr. David Steel: rose——

Mr. Callaghan: rose——

Mr. Speaker: Order. From time to time the Leader of the Opposition is allowed extra latitude. I said that in the last Parliament. Mr. James Callaghan.

Mr. Callaghan: Is not the conclusion, therefore, that this winter we shall have higher inflation and higher unemployment? When did the Prime Minister promise that in her election speeches?

The Prime Minister: We had both of those in very big measure under the previous Government, which is why I am changing the policy.

Mr. David Steel: How does the Prime Minister square her commitment to free collective bargaining with the letter sent by the Secretary of State for Industry to the chairmen of nationalised industries setting pay limits and asking for Government consultation on pay settlements? Surely the kind of pay policy that is private and applies to only one sector of the economy is the last kind that will work.

The Prime Minister: I think that the right hon. Gentleman has misinterpreted the letter. That letter said that we are setting cash limits—a system which relies on the nationalised industries to improve their productivity performance and to reduce real unit labour costs.

Mr. Nicholas Winterton: When my right hon. Friend met the Confederation of British Industry, did she discuss the future role of the National Enterprise Board? Was the view expressed that that body should have its role reduced and that it could act very well as a loan board for smaller businesses, enabling the Board to buy equity in a private company requiring funds for technological invention and for the company to repurchase that equity after a fixed period, thus allowing the private company to remain a private and free enterprise?

The Prime Minister: I did not discuss that matter with the CBI. As my hon. Friend knows, we are intending to change the role of the NEB, and we shall be publishing, or have published, a Bill accordingly.

Mr. Meacher: Will the right hon. Lady confirm that the Government intend to keep to their present public sector borrowing requirement ceiling? If so, will she indicate whether it is her intention, or merely the by-product of her policies, that unemployment will rise, according to The Economist, to 9½ per cent by the end of 1981?

The Prime Minister: We intend to keep to the public sector borrowing requirement ceiling. I have vivid memories of what happened when we did not in 1976, when we had to call in the IMF. On that occasion we had real cuts in public expenditure of some 6 per cent, from the level of the previous year. We intend to keep to the ceiling. The hon. Gentleman is inviting us to spend our way out of the difficulties that we are in now. That would lead only to increased inflation and increased unemployment.

RAILWAY ACCIDENT (INVERGOWRIE)

Mr. Bill Walker: (by private notice) asked the Minister of Transport if he will make a statement on the train crash at Invergowrie on 22 October 1979.

The Minister of Transport (Mr. Norman Fowler): At about 11.10 yesterday morning at a point about half a mile to the east of Invergowrie station the 9.35 express passenger train from Glasgow to Aberdeen, running at speed, collided with the rear of the 8.44 stopping train from Glasgow to Dundee which had just called at Invergowrie. The force of the collision threw three coaches of the Dundee train, which was at a standstill, on to the shore of the Firth of Tay. I regret to inform the House that four people, including the driver and assistant driver of the Aberdeen train, were killed and 40 were taken to hospital, of whom 11 were seriously injured.
I have ordered a public inquiry, which will be held by the inspecting officer of railways as soon as possible. Until that inquiry has been held it would be wrong to speculate on the cause of the accident.
I am sure, however, that the House would wish to express its deepest sympathy with the families of those who lost their lives and our hope for a speedy recovery of the injured. I should also like to pay a special tribute to the prompt and effective assistance rendered by the emergency services.

Mr. Walker: First, I extend my sympathy to the relatives of the dead and injured. Is my right hon. Friend aware that the line has been the subject of many complaints about time-keeping? Secondly, does the line have the most up-to-date signalling equipment?

Mr. Fowler: My information is that it is a perfectly adequate and safe signalling system. The other part of my hon. Friend's question is one of the matters that will have to be taken into account by the inquiry. Indeed, that is why we are having a public inquiry.

Mr. Grimond: On behalf of Liberal Members may I express our regret over this sad accident and extend our sympathy to the relatives of those who were killed and to those who were


injured? Will the right hon. Gentleman confirm that among the matters considered by the inquiry will be the reason why the slow train broke down?

Mr. Fowler: I cannot direct the inquiry to consider any one matter, but I am certain that that is one of the issues that will be examined by the inquiry.

Mr. Robert Hughes: I associate myself with the sympathy that has been expressed for the bereaved and the injured. I welcome the fact that a public inquiry is to be set up so rapidly, with a full-ranging remit. May we take it that the result of the inquiry will be published in full?

Mr. Fowler: Yes, that will be the position. The inquiry will be held as soon as possible. First, British Rail will conduct an internal inquiry. A public inquiry usually begins after about 10 or 14 days. The details and the findings of the inquiry will be published.

Mr. Henderson: Is my right hon. Friend aware that one of those sadly killed in this event was the driver of the train, Mr. Robert Duncan, who lived in my constituency? Mr. Duncan leaves a wife, son and daughter. Is my right hon. Friend aware that within his community Mr. Duncan was a well respected person? He was both a special constable and an elder of the kirk. It causes considerable anxiety to the families of drivers when there is the possibility that erroneous assumptions will be made—for example, that there may have been some fault on the driver's part. Will my right hon. Friend say that it would be an error to make such an assumption?

Mr. Fowler: I entirely agree with my hon. Friend. I am sure that the whole House will wish to express its sympathy to the families of those who lost their lives. My hon. Friend is correct when he says that we should not jump to any conclusion about the cause of the accident until the inquiry has taken place.

Several Hon. Member: rose—

Mr. Speaker: Order. I shall call both the hon. Members for Dundee, West (Mr. Ross) and Dundee, East (Mr. Wilson).

Mr. Ernie Ross: Is the right hon. Gentleman aware that the accident

occurred on the boundary of my constituency? I take the opportunity to associate myself with the expressions of sympathy to the bereaved families and to those who were injured in the tragedy. I commend the work of the rescue emergency services, which worked under hazardous conditions. All the parties involved in the tragedy were full of praise for the efficient and sympathetic manner in which the rescue services carried out their work. The Minister has said that there will be a full inquiry into the cause of the tragedy. May I assure the right hon. Gentleman that in the discussions that I have had with the local trade unions involved in the tragedy their representatives have made it clear that they are anxious to co-operate to ensure that the reason for the tragedy is made known?

Mr. Fowler: I am grateful to the hon. Gentleman for making both main points.

Mr. Gordon Wilson: May I, too, asociate myself with the expressions of sympathy that have ben made to the families of those who were killed in the accident, including one of my constituents, and to those who were injured? There has been a dreadful tragedy and there is nothing very much that one can say on occasions such as this to measure the loss that families will feel. However, I ask the right hon. Gentleman to take into account and to extend the remarks made and questions asked about the timing of the trains in relation to the inquiry. Does he agree that one train had broken down and that the other one was about 22 minutes late? Will he ensure—this follows expressions made to me in the past by British Rail employees—that an inquiry is made into the state of the rolling stock on the stretch of line involved, as it has been prone to breaking down in the past?

Mr. Fowler: I cannot direct the inquiry to the matters that it should take into account. I am sure that those responsible will have heard what the hon. Gentleman has said.

Mr. Millan: May I also express my sympathy to the relatives of the bereaved and to those who were injured? I express my thanks to the emergency services. We are grateful that there is to be a full inquiry into the tragedy and


that the report will be published. Perhaps even now, before the inquiry has reported, British Rail will look again at its safety procedures. It has an excellent safety record, but there have been a number of disturbing incidents recently. It would be reassuming to the public if, even now, British Rail were to give that sort of assurance.

Mr. Fowler: I am grateful to the right hon. Gentleman. It is important to emphasise that British Rail's safety record is extremely good. If British Rail's internal inquiry reveals the need for immediate changes in practice, those changes will be implemented.

EXCHANGE CONTROLS

The Chancellor of the Exchequer (Sir Geoffrey Howe): With permission, Mr. Speaker, I wish to make a statement about exchange controls.
In my Budget Statement on 12 June I announced our intention progressively to dismantle these controls. I made a number of relaxations at that time; and again on 18 July, when I informed the House of the first major move towards liberalising outward portfolio investment.
I have now decided to remove all the remaining exchange control restrictions from midnight tonight, apart from those still needed, I hope not for long, in relation to Rhodesia.
With that single exception, there will from tomorrow be full freedom to buy, retain and use foreign currency for travel, gifts and loans to non-residents, buying property overseas and investment in all foreign currency securities. Portfolio investment will be wholly freed, and the requirement to deposit foreign currency securities with an authorised depositary is abolished. Foreign currency accounts can be held here or abroad. Passport marking for travel funds can now be abolished The necessary Treasury orders are being laid this afternoon.
The removal of controls will lead to public expenditure savings of about £.14½ million a year, which represents the current cost of about 750 staff at present employed on exchange control work at the Bank of England and about 25 at the Treasury. I should like to take this opportunity of thanking all those who have had the task of administering the controls—not only in the Treasury, the Bank of England and Customs and Excise, but those in the private sector, whose co-operation has enabled the system to work.
Under arrangements announced in this House in 1971, exchange control has been used to prevent United Kingdom tax incentives supporting the leasing abroad of foreign equipment. I propose to introduce in the 1980 Finance Bill provisions, which will take effect from tomorrow, to continue to prevent this. Further details on this matter are available in the Vote Office.
From tomorrow, we shall be meeting in full our European Community obligations on the freedom of capital movements.
Exchange controls have been with us in one form or another for just over 40 years. They have now outlived their usefulness. The essential condition for maintaining confidence in our currency is a Government determined to maintain the right monetary and fiscal policies. This we shall do.

Mr. Healey: The Chancellor made an important statement. It betrayed a baffling sense of priorities. He has just given Britain the highest inflation rate in the industrial world. He started unemployment moving up again after two years of continuous decline. He has produced a collapse of industrial investment. The whole of British business now faces a severe cash crisis. Yet he comes along this afternoon not to offer any measures to remedy the situation but to announce a reckless and doctrinaire decision which can only make the situation worse.
In the light of our improved performance since 1976 there has been a case for some time for a relaxation in exchange control, but the right hon. and learned Gentleman is not only suspending all the rules governing the control of our exchanges; he is abolishing at a stroke the whole apparatus of control, so that if the balance of payments, or the position of our reserves, or the value of the pound, moves in such a way that it is necessary to restore controls it will be impossible for him to do so.
First, what does the Chancellor think will be the consequences of his decision? We were told by the Bank of England last month that the £500 million outflow the previous month was largely caused by the relaxation of exchange controls following the Budget. Can the Chancellor say what proportion of that sum was due to rich men buying property abroad and moving their wealth abroad? Secondly, what is the value of the applications that he has received for foreign exchange at the official rate since the relaxations in the Budget?
In the light of the answers to those questions will he say how much the financial institutions in Britain will invest abroad rather than in British industry,

which is already suffering from a serious cash crisis? How much are the financial institutions likely to invest abroad rather than in Government securities so as to keep the money supply under control and finance the public sector borrowing requirement?
What does the Chancellor believe will be the effect of this decision on our exchange rate and consequently on the rate of inflation in Britain, and on interest rates? Finally, can he tell us no more about the reasons for his decision than that there will be a saving of £14½ million in public expenditure? Does not he recognise that to change in a moment an environment in which industry and finance have lived for 40 years risks as disastrous consequences as the decision of one of his predecessors to institute competition and credit decontrol some years ago, which were directly responsible for the fringe bank crisis and speculation in the property markets in 1973–74?
The right hon. and learned Gentleman must realise that this is one more reckless, precipitate and doctrinaire action, which the Government will regret no sooner than those who lose their jobs or go bankrupt as a result.

Sir G. Howe: I understand the right hon. Gentleman having difficulty in addressing himself to this argument. At one point he asserted his recognition of the strength of the case for some changes in our regime of exchange control. I welcome his limited support to that extent. However, at the commencement of his questions he emphasised the reckless, doctrinaire, unprincipled folly of making these changes. He must recognise that the changes that we are making are not undertaken in a moment; they are the third step in the programme of progressive dismantling of these controls which I announced at the time of the Budget. They have been undertaken stage by stage, not with a view to influencing the exchange rate but with a view to removing some of the restrictions that unjustifiably remain on investment decisions by our people.
The right hon. Gentleman suggested that these decisions would diminish the investment resources available in this country. He knows that that is not true. He knows from his own recollection of


his days at the Treasury that the overwhelming body of evidence to the Wilson committee showed that there was no lack of resources available for capital investment in this country. The problem of one of the many inheritances from him is the lack of profitable investment opportunities. The idea of promoting additional investment overseas is that it will promote the expansion of the British markets. It is far better, in a period when oil adds strength to our resources and our currency, to acquire income-producing assets overseas than to shelter behind an apparatus of control.
The right hon. Gentleman began his questioning by suggesting, in an astonishing opening, that the inflation rate, the unemployment level, and the collapse—as he described it—of confidence in British industry were events for which the Government were responsible. He could not have more accurately described the inheritance that he passed on to us at the Treasury. During his period at the Treasury the pound was not protected from adverse consequences by the existence of the exchange control regime. It is not a regime of that kind that can produce economic strength—it is economic policies of a kind to which the right hon. Gentleman is not accustomed.

Mr. J. Enoch Powell: Is the Chancellor aware that I envy him the opportunity and the privilege of announcing a step that will strengthen the economy of this country and help to restore our national pride and confidence in our currency?

Sir G. Howe: I am grateful to the right hon. Gentleman for his support. I am not unaware of the historic importance of the decisions that I announced today. They mean a major break with the regime of control with which we have lived for almost 40 years. I am indeed grateful to the right hon. Gentleman for the recognition that he gave to that fact.

Mr. Fletcher-Cooke: Is my right hon. and learned Friend able to estimate the enormous increase in the earnings of the City of London as a result of being freed from the interminable barriers and paperwork that were required by the contols that he has so rightly abolished?

Sir G. Howe: I should not like to put an estimate upon that, but I have no doubt that my hon. and learned Friend is

entirely right to draw attention to the extent to which these changes will add to the attractiveness and effectiveness of the City of London as the world's financial capital.

Mr. Richard Wainwright: Is the Chancellor aware that his announcement will be very welcome to all who opposed the attempts to insulate Britain from the rest of the world? Will he confirm that if one of the early effects of his measures is to reduce somewhat the sterling exchange rate, that will be good news for the millions of our people engaged in the exporting industries?

Sir G. Howe: I indicated in an earlier reply that this change is announced not with a view to influencing the exchange rate; it is announced on its own merits. It is right to give this additional degree of freedom and to allow the pound to operate in the world unrestricted by restraints of that kind.

Mr. Rost: Will British nationals also be free to open bank accounts abroad if they so wish?

Sir G. Howe: That is one of the freedoms that will be restored under the changes that I announced.

Mr. Cryer: Does the Chancellor accept that one of the features of post-war Britain has been the signal lack of enterprise by private enterprise? Does not he accept that that is a signal for those enterprises to shovel money abroad and reduce the amount of investment for the British worker, and that the trade union movement will see this as a classic betrayal of the workers of this country by a Tory Government who are the lickspittles of the capitalist sector?

Sir G. Howe: I would not begin to follow the hon. Gentleman in his emotional view of the world. My own judgment is that the enterprise of private enterprise has been the main factor in defending the economy of this country from the ravages of Socialism.

Mr. Emery: Will the Chancellor of the Exchequer accept not only our congratulations on making this move but that there will be major encouragement to the City that he has seen fit to do this not in a number of little bites, but has had the courage to sweep it away instantly in one full measure?

Sir G. Howe: I am grateful for my hon. Friend's support.

Mr. McWilliam: Will the right hon. and learned Gentleman please tell the House what he predicts will be the net effect on industrial investment of his decision this afternoon, and what will be the net capital outflow?

Sir G. Howe: It is not possible to make any net prediction of that kind, but those economies that have achieved greater strength and success than our own have been notable for the extent to which they have been expanding their overseas investment. Germany, Japan and the United States are good examples. The evidence of the inquiries that have been made suggests that a willingness on the part of our economy to invest overseas will be reflected in an enlargement of our market opportunities overseas, and the prospect of a continuing flow of income to this country that we would not otherwise have. I am quite certain that is right to allow those decisions to be taken that will contribute to the strength of our industrial economy and to the growth of jobs in this country, rather than the reverse.

Mr. Budgen: Will my right hon. and learned Friend agree that this move is most of all to be commended for the enhanced freedom that it gives to individual citizens, and for the further discipline that it will impose upon this Government and all Governments in maintaining the value of our currency?
I have one small and perhaps carping point to make. Does my right hon. and learned Friend agree that it is a practice of very dubious constitutional propriety to introduce even a small control, to take effect from today, when he is not to have, on his own account, the support of legislation or of Parliament until the spring of next year? Is that not a rather dubious slip into the principle of retrospective legislation?

Sir G. Howe: I appreciate, as always, my hon. Friend's concern about the point of principle to which he has just referred. I assure him that I have had it well in mind. We shall be continuing a necessary fiscal provision that has prevailed until now. By announcing it in the House today I am giving clear warning that that is our intention. There is nothing that

I judge to be improper in so doing and in asking the House to enact it when the time comes.

Mr. Healey: Will the Chancellor at least attempt to answer my questions, which were repeated by one of my hon. Friends? The Chancellor must have made some estimate of the effect of this decision on the readiness of the financial institutions to buy Government securities and the readiness of the financial institutions to invest in British industry rather than abroad. Can he tell us what the consequences will be? He must have noticed that the only case put by his supporters on the Government Benches was based on a totally doctrinaire belief in the validity of market forces, which has been exploded time and again in our recent experience.

Sir G. Howe: It is clear that any change of this kind is likely to lead to some capital outflows across the exchanges out of this country, but it is just as likely to be matched by capital inflows in the opposite direction, without producing any substantial impact on the exchange markets. The right hon. Gentleman must understand that the prospects of promoting successful and effective investment in this country do not depend upon the preservation of a ring fence around our economy. They depend on the establishment within our country of conditions of co-operation by trade unions and their members, as well as anything else, which will make investment in Britain effective and successful. These changes do nothing to impede that. On the contrary, they give us the opportunity of acquiring income-producing investments abroad. There is total sense in that.

Mr. Robert Sheldon: Is the Chancellor aware that his statement today provides real cause for dismay? Is he further aware that he has been presiding over the collapse of British industry? His answer to this, rather than to intervene in the exchange rate, is to provide means of spending money overseas in acquiring capital assets. This decision will mark a turning point in the fortunes of this country, which I believe that he and many others will bitterly regret.

Sir G. Howe: The right hon. Gentleman appears to have overlooked the fact


that all the representations made to me by and on behalf of British industry have been to the effect that I should announce precisely this change. It requires this change to be made as part of sensible economic management. It is not I who have been presiding over the collapse of British industry but the right hon. Gentleman and his colleagues in the last Government. There has indeed been a marked change of direction as a result of the change of Government. British industry recognises that we are taking the steps, which have been needed for too long, to begin restoring the conditions in which it can re-acquire prosperity.

Mr. Alexander: Will my right hon. and learned Friend indicate in some way how the £14½ million will be saved? Will he assure the House that an enormous element will be the release of civil servants to more productive and useful work?

Sir G. Howe: The figures that I have quoted for the saving are the figures that will be achieved. The staff at present employed on exchange control are in most cases staff of high skills and qualifications, for whom I have no doubt other opportunities will be forthcoming in areas of the economy where their services will be much needed and well used.

Mr. Cant: The Chancellor has given no reasons for undertaking this step, except in the most vague terms. Will he indicate what is likely to be the effect of these measures on the exchange rate of the pound? Does he anticipate, as all theorists suggest, that the exchange rate will now begin to decline? Is this acceptable? Is this what he is seeking? If this is what he is seeking, would it not have been much simpler to reduce the minimum lending rate, to stop funds coming into this country?

Sir G. Howe: As I have indicated, this change is not announced with a view to producing a given consequence in terms of the exchange rate of the pound. It is announced on its own merits. It would not be wise to accept the advice of the hon. Gentleman and to begin reducing interest rates as a means of influencing the exchange rate. The decision follows from our determination to establish and maintain effective monetary control as the foundation of conquering inflation.

That in itself is the foundation for a sensible outlook for the exchange rate.

Mr. Bruce-Gardyne: I warmly congratulate my right hon. and learned Friend for his wholly admirable statement today. Can he explain to us, in the light of the remarks of his predecessor this afternoon, why that predecessor was so keen to move in the same direction last year but was frustrated by the obscurantism and sheer illiteracy of the general council of the Trades Union Congress?

Sir G. Howe: I dare say that the right hon. Member for Leeds, East (Mr. Healey) would find it hard to answer that question. Far be it from me to try to penetrate the mysterious working of his mind.

Mr. Denzil Davies: As the Chancellor has said that the main determinant of confidence in the pound is monetary and fiscal policy, will he confirm that it is still the Government's policy to achieve a yearly reduction in the public sector borrowing requirement?

Sir G. Howe: We have announced our target for the public sector borrowing requirement for the present year and it is our intention to achieve that target.

Mr. Beaumont-Dark: May I thank the Chancellor of the Exchequer for a verbal reply to a written question that I have tabled for today and ask him his view on two things? First, manufacturing industry will welcome this relaxation. Secondly, when we had exchange control regulations the pound still dropped to 1·54 dollars during the Labour Party conference of that year. The pound will be kept firm by a realistic Government policy to ensure that this country can compete, can work, and can thrive. The pound will then be at a higher level than today, backed by resources and not by theory and dogma.

Sir G. Howe: I entirely endorse my hon. Friend's observations.

Mr. Healey: I think that the Chancellor misunderstood the question put by my right hon. Friend the Member for Llanelli (Mr. Davies). Several times since the Budget the Chancellor has said that it is his intention progressively to reduce, year by year, the public sector borrowing requirement and the monetary targets. If


he is not prepared to reassert that determination today, it would constitute a very important change of policy, which the official Opposition would welcome. I hope that he will come clean on that.

Sir G. Howe: The right hon. Gentleman knows that, as I stated in my Budget speech, we are determined to secure a reduction in the burden of public borrowing and, as he said, a stage-by-stage reduction in the monetary targets. We shall be making announcements in due course.

Mr. Latham: Is my right hon. and learned Friend aware that the last people in the world from whom we need lectures on the subject of the exchange rate are former Treasury Ministers, under whom it reached its lowest level ever? Will he confirm that if we cannot defend our exchange rate by our own economic performance rather than by a blanket of controls there is something wrong with our production?

Sir G. Howe: Yes. My hon. Friend makes the point that I have already made in answer to the right hon. Member for Leeds, East (Mr. Healey). The existence of a regime of control of this kind failed altogether to protect our economy from the impact of the disastrous realities of the management of the economy by the right hon. Gentleman. It is not the regime or the controls that will be effective; it is the way in which we manage our economy and perform within it.

Mr. Douglas: The right hon. and learned Gentleman has referred to British industry. Will he confirm or deny that the TUC and/or the CBI agree with this decision? Does he agree that the reason for this change is the increase in revenues from North Sea oil and that it will be a poor inheritance for the people of this country to buy Howard Johnsons and have closed shipyards and steelworks, and a decline in manufacturing investment?

Sir G. Howe: The CBI has been urging us to make this change in policy. The underlying justification for this change includes, among other things, the proposition that when we are acquiring substantial revenues from North Sea oil—itself a capital asset—it makes sense for

us to use our resources to acquire income-producing capital assets in other parts of of the world. It is a long-term change, which makes total and complete economic sense, as well as the additional justification for sweeping away unnecessary controls.

Mr. Adley: Will my right hon. and learned Friend draw comfort from the fact that support this afternoon comes not only from this side of the House but from the Ulster Bench and the Liberal Bench? Does he agree that he should equate the gibes from the former Chancellor of the Exchequer and his colleagues about freedom and market economy with the kind of mentality that allowed the post-war Labour Government to keep sweets rationed rather than to allow market economy forces to get to work on those, too?

Sir G. Howe: I agree that the breadth, quality and nature of the support that I have received this afternoon for the decision that I have announced tends to confirm me in the view that it is a correct decision.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall call the five hon. Members who have been rising.

Mr. Leighton: We have heard from the Prime Minister this afternoon that Britain is now subject to what she calls the edicts of the Common Market, and the Chancellor has told us that he is now fulfilling a Treaty commitment for the free movement of capital. Does he agree that as capital has no nationality, no patriotism, but is solely attracted by the highest rate of profit, the most likely result of his move will be that the entrepreneurs, of whom we hear so much, will now shovel their capital on to the Continent, where they will get a higher rate of return and will accelerate the deindustrialisation of this country?

Sir G. Howe: The capacity of capital to move from one corner of a market to another and around the world market in search of opportunities for higher profit is one of its greatest justifications. Our economy has performed less well than it should have done because during the years of Socialist direction and over-taxation there was a lack of profitable and effective investment opportunities in this


country. When we change those conditions, as this Government are doing by their policies, capital will find more fruitful opportunities for central investment in this country. Meantime, it makes good sense for capital to be employed in producing income from overseas and building up additional assets and opportunities for exports as a result of this measure.

Mr. Norman Atkinson: For those reasons, does not the Chancellor's statement represent a total and final abdication to the multinational companies? Is this not now the prelude to the sale of public sector assets to overseas interests?

Sir G. Howe: I do not think that the hon. Gentleman understands the essential requirements of how our economy can work. Our economy is attractive and will be the more attractive to multinational companies as well as to British investors—British entrepreneurs—the greater our success in creating conditions in which investment here can be profitable and successful. If the hon. Gentleman will join me in seeking to persuade his friends in the trade union movement of the crucial importance of recognising the legitimacy of profit seeking investment here, this country will be a great deal more prosperous than it was under the Labour Government.

Mr. Spearing: The Chancellor reminded the House that this move was fully in line with our obligations under the Treaty of Rome. Will he assure the House that it has nothing whatsoever to do with other monetary obligations of that Treaty under current discussion? Will he confirm that, as the Government's object is to give full freedom to the pound and let it find its own level in world markets, the Government have ruled out sterling from joining the EMS?

Sir G. Howe: No decision has been taken on the relationship between our currency and the exchange rate mechanism of the EMS. This decision has been taken entirely on its own merits.

Mr. Skinner: Will the Chancellor confirm that the Government's strategy hitherto has been to try to push investment away from the public sector to the private sector, presumably with a strong emphasis on small firms? Will not today's announcement, which is a continuation of the policy announced in July, mean

that more money will, in the main, go into the multinationals abroad as opposed to the small firms that the Tory Party seems bent on supporting? Has the Chancellor not a duty to tell the House what effect this will have on the balance of payments, especially when we take into account that, within only four months of this Government being in office, the invisibles have become invisible?

Sir G. Howe: The hon. Gentleman must understand that this decision in no way impairs the capacity of small firms to expand their investment in this country. As I have several times said today, there is no lack of capital for investment in this country. The shortage has been lack of suitable and effective opportunities for that investment. The Government are committed to policies that will increase those opportunities for both small and large firms.

Mr. Dubs: Does the Chancellor agree that flows of capital into and out of this country are influenced by the question whether our rate of interest is higher or lower than that of other industrial countries? Will not the steps that he has announced today leave him particularly dependent upon the rate of interest as a weapon and therefore delay into the long and distant future any significant reduction in the high interest rates that are now crippling our economy?

Sir G. Howe: Rates of interest are not a significant determinant of flows of that kind. The underlying health of the ecenomy is far more significant in the long run. Interest rates are a necessary weapon in securing proper and effective monetary policy—control of the money supply—and they remain to be used and will be used for that purpose.

Mr. Hooley: Will there be any restriction on investment in or the acquisition of property in South Africa?

Sir G. Howe: There are no special provisions in relation to that matter in my announcement this afternoon.

POST OFFICE (REORGANISATION)

Mr. Speaker: Yesterday the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) raised a point of order with me. I have looked very carefully into the matter that he raised and


I am entirely satisfied that it is not a matter for me.

BILLS PRESENTED

INDUSTRY

Mr. Secretary Joseph, supported by Mr. Peter Walker, Mr. Secretary Younger, Mr. Secretary Edwards, Mr. John Biffen, Mr. Adam Butler, Mr. Michael Marshall and Mr. David Mitchell, presented a Bill to make further provision in relation to the National Enterprise Board, the Scottish Development Agency, the Welsh Development Agency and the English Industrial Estates Corporation; to amend the Industry Act 1972 and the Industry Act 1975; to remove the requirement for a register of the financial interests of members of British Shipbuilders; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 51.]

SHIPBUILDING

Mr. Secretary Joseph, supported by Mr. Secretary Pym, Mr. Secretary Prior, Mr. Secretary Younger, Mr. Secretary Atkins, Mr. Secretary Nott, Mr. John Biffen, Mr. Adam Butler and Mr. Michael Marshall presented a Bill to raise the limits imposed by section 11 of the Aircraft and Shipbuilding Industries Act 1977 in relation to the finances of British Shipbuilders and its wholly owned subsidiaries; and to extend the application of section 10 of the Industry Act 1972 to include the alteration of completed and partially constructed ships and mobile offshore installations: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 52.]

EUROPEAN COMMUNITIES (GREEK ACCESSION)

Sir Ian Gilmour, supported by Mr. Douglas Hurd, Mr. Adam Butler and Mr. Cecil Parkinson, presented a Bill to extend the meaning in Acts, Measures and subordinate legislation of "the Treaties" and "the Community Treaties" in connection with the accession of the Hellenic Republic to the European Communities: And the same was read the First time; and ordered to be read a Second time tomorrow. [Bill 53.]

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: By leave of the House, I shall put together the six questions on the motions relating to statutory instruments.

Hon. Members: Object.

Mr. Speaker: I believe that it is No. 5 to which hon. Gentlemen seek to object. Perhaps by leave of the House I may put the first four together, unless there is an objection.
The Question is, That the four instruments be referred to a Standing Committee on Statutory Instruments.

Hon. Members: Object.

Mr. Speaker: I shall put the instruments one by one.

Ordered,

That the Legal Aid (Financial Conditions) (No. 2) Regulations 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-stevas]

Ordered,

That the Legal Advice and Assistance (Financial Conditions) (No. 3) Regulations 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]

Ordered,

That the Fruiting Plum Tree (Planting Grants) Scheme 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]

Ordered,

That the Plum Material and Clearance Grants Scheme 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]

Motion made, and Question put,

That the draft European Communities (Definition of Treaties) (International Wheat Agreement) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]

Not less than 20 Members having risen in their places and signified their objection thereto, Mr. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &amp;c.).

Ordered,

That the Customs Duties (ECSC) (Quota and Other Reliefs) (Revocation) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.]

BUSINESS OF THE HOUSE

Ordered,

That, at this day's Sitting, Standing Order No. 3 shall apply to the Motion relating to State Aids for the Steel Industry with the substitution of One o'clock or three hours after it has been entered upon, whichever is the later, for the provisions in paragraph (b) of the Standing Order.—[Mr. Le Marchant.]

TRANSPLANT OF HUMAN ORGANS

4.13 p.m.

Mr. Tam Dalyell: I beg to move,
That leave be given to bring in a Bill to allow hospitals to take the organs, such as kidneys, of any patient, once clinical death has been established, other than those of a deceased person who has contracted out during his life-time by registering, on a central computer, his desire not to donate organs.
This Ten-Minute Bill seeks to amend the Human Tissue Act to allow hospital authorities, once clinical death has been established by two doctors, to remove kidneys from any person other than those who have contracted out through a central computer during their lifetime.
This is the seventh occasion on which my sponsors and I have put forward a contracting-out Bill, and I candidly say to the House that the sponsors of this Bill and myself would fully agree that kidney donation on a voluntary basis would be preferable to the contracting-out scheme, if voluntary donation had succeeded in producing anything like the number of kidneys needed. The bleak truth is that the kidney donor card scheme, put forward with the best of intentions by the present Secretary of State for Industry when he was Secretary of State for Social Services in the early 1970s, has not worked and has fallen painfully short of expectations.
Nor is the disappointment surprising, for a very basic human reason. Accidents are things that occur to other people. At least, if an accident is going to happen to me, it will not be today. Few of us concern ourselves with the possibility of our own demise tonight. Therefore, we should not be astonished to find that the Marplan inquiry, made for the Department of Health and Social Security, entitled "Public Attitude to Kidney Donation", states that at most 5 per cent. of the population carries donor cards.
In the same breath as I mention that survey, I should concede—as the Minister knows well—that the general findings do not suit the case which the contractors-out are deploying. In response, we challenge the whole basis of the survey for a number of reasons, and I give just two examples.
On page 10, it is revealed that Marplan spatchcocked all sorts of other issues into the kidney donation survey, such as attitudes to prison visiting and to voluntary work with the mentally handicapped. This is an assault on the spirit of the undertaking given on 3 March 1978, when I initiated a Friday debate on the whole issue of transplant law.
In paragraph 4, Marplan undermines the authority of its report because it states:
Additionally when specifically told about the current shortage of kidneys, respondents tended to claim this would increase their inclination to donate. Similarly, when told about the current shortage of kidney machines, and of the disadvantages to the patient of this form of treatment, compared with a transplant, respondents attitudes towards donation tended to become more favourable.
In other words, when people are brought face to face with the realities of kidney shortage, their attitudes change.
The gut realities are, first, that many people, with potentially useful working lives, die because of shortage of matching tissue. Besides that, as Harry Thomas, of the National Federation of Kidney Patient Associations puts it:
A plentiful supply of kidneys means not only more transplants, but better transplants, because the more kidneys there are available, the better the chance of a good match.
Secondly, many others have endured the draining agony of renal dialysis, often with consequential family misery, and always at £5,000 per machine with £14,000 per year for running costs. This all comes from the finite resources of the National Health Service.
Thirdly, since the deterioration of kidneys sets in 30 minutes after death and no kidney is of use one hour after death, immediate decisions have to be made.
Can any hon. Member present imagine himself or herself in the position of a doctor contacting, usually by phone, the shattered parents of a lad killed in a motor cycle accident to ask "Can we have your boy's kidneys?" Can we imagine that situation when the Mum or Dad has been told of the bolt-from-the-blue tragedy a minute earlier? Most of us could not bring ourselves to do it. That is why decisions about donations should not be made at the moment of maximum grief, and partly the reason why hon. Members should allow my


sponsors and me an opportunity under the Ten Minutes Rule procedure.

Question put and agreed to.

Bill ordered to be brought in by Mr. Tam Dalyell, Mr. Jack Ashley, Mr. Lewis Carter-Jones, Mr. Dennis Canavan, Dr. John Cunningham, Mr. A. E. P. Duffy, Mrs. Gwyneth Dunwoody, Mr. Peter Hardy, Dr. J. Dickson Mabon, Dr. M. S. Miller, Mr. Laurie Pavitt and Mr. Phillip Whitehead.

TRANSPLANT OF HUMAN ORGANS

Mr. Tam Dalyell accordingly presented a Bill to allow hospitals to take the organs, such as kidneys, of any patient, once clinical death has been established, other than those of a deceased person who has contracted out during his lifetime by registering, on a central computer, his desire not to donate organs; And the same was read the First time; and ordered to be read a Second time upon Friday 16 November and to be printed. [Bill 54.]

Orders of the Day — COMPETITION BILL

Order read for resuming adjourned debate on Question [23 July], That the Bill be now read a Second time.

4.17 p.m.

The Secretary of State for Trade (Mr. John Nott): If I may resume, Mr. Speaker, may I say that there is sometimes a tendency in politics to dress up minor changes in gaudy clothes and to describe policies of some inconsequence as turning points in history. As politicians we have all been guilty of that offence. Yet when an annoucement of great significance is made, often within a day or two, it becomes a recognised or even accepted fact of economic life, almost as if no change had been made. I believe that the statement which the Chancellor of the Exchequer made at this Dispatch Box today was, by any measure, a major event. It signifies greater freedom and a more outward-looking economic policy. There is no reason why my right hon. and learned Friend's announcement should not have a profound effect on business attitudes in this country; only time will tell. I believe that it is evidence that politicians can change attitudes and influence the climate of opinion.
Not more than a year or two ago, the suggestion by my right hon. Friends and I, then in opposition, that we could and would remove exchange controls—and, indeed, price controls, one of the subjects in this Bill—was greeted with disbelief in many circles, including many circles in the City. Today it is not only accepted but greeted with enthusiasm, and copyright to such a major liberalisation in our economic affairs is now claimed by countless economic commentators. Therefore, it is a privilege to follow my right hon. and learned Friend the Chancellor by reopening a debate which signals the removal of one control, and also a burden, on our domestic economy, the burden of price controls, just as the abolition of exchange controls signals the ending of another control and a burden which has persisted for the past 40 years.
The House must excuse my enthusiasm for my right hon. and learned Friend's statement, but it represents, as does the Competition Bill, an important step away


from the recent trend in this country towards an inward-looking, control-ridden and over-centralised society towards an environment of greater freedom, with perhaps a touch of risk and adventure—certainly there is some risk attached to these policies—that I think was the embodiment of an earlier and more successful period in our history.
I noted the reaction from the right hon. Member for Leeds, East (Mr. Healey), the former Chancellor of the Exchequer. Where we move step by step towards greater freedom of thought and of action, I regret that the Labour Party seems to move away from it. In overseas trade, where competition and open markets remain the greatest stimulus to trade abroad, just as greater competition remains the greatest protection to the consumer here at home, I feel that the Labour Party has resiled from these positions.
The hon. Member for Tottenham (Mr. Atkinson), interrupting my right hon. and learned Friend today, made what I thought were some characteristic comments. A few years ago, the hon. Gentleman said:
import controls are not temporary expedients to effect protection. They are essential instruments of planning. If the whole of the Socialist case is about planning the economy, how can we plan it in the absence of controls on our external trade?"—[Official Report, 3 Nov. 1975; Vol. 899, c. 10.]
That was a characteristic statement, and I quite understand that it came perfectly sincerely from the hon. Gentleman. But it is a pity that one of the two great political parties in our country should now be dominated by what I might call a sort of ration-book mentality which is the privilege of little minds.

Mr. John Smith: I take it that the Secretary of State recollects that he is speaking by leave of the House because of his failure to explain the Bill, although he was given an opportunity to do so, on an earlier occasion. Will he now concentrate at least part of his speech on an explanation of the Bill that he is recommending to the House?

Mr. Nott: Of course I will. I do not want to go on for too long. I have already spoken on the Bill for about 23 minutes, and I am sure that the right hon. Gentleman would not like me to go on very long today. But I want to say

that a protected Britain—by which I mean a Britain with price controls, exchange controls and import controls—would inevitably be a Socialist Britain, with planning agreements, rationing and central controls.
I respond to the right hon. Member for Lanarkshire, North (Mr. Smith) by recalling that when we began the debate before the Summer Recess I was asked to place the Bill in the broader context of the Government's economic policy. I will respond to that request in a moment, but before doing so perhaps I should remind the House, in view of the three months which have elapsed, of the three principal elements of the Bill.
First, it strengthens the power of the Director General of Fair Trading and the Monopolies and Mergers Commission to investigate practices which restrict or limit competition in both the public and private sectors. Secondly, it gives a new power to the Secretary of State to refer nationalised industries and other public undertakings to the Monopolies and Mergers Commission for an investigation into their efficiency and costs and into any possible abuse by these public sector bodies of their monopoly power which might work adversely for the consumers. It is under these powers that the Monopolies and Mergers Commission will investigate the London commuter services of British Rail. Thirdly, the Bill abolishes the Price Commission.
When the debate began on 23 July, I explained the new procedures which we are giving to the Director General of Fair Trading to investigate anti-competitive practices. They are on the record in Hansard, and I will not go through them all now, but for the benefit of those hon. Members present who were not here on that occasion I should explain that we have avoided in the Bill the approach embodied in the United States anti-trust legislation. We have avoided it partly because it would have involved a very long statute setting out an extended list of anti-competitive practices. That would have brought the whole procedure into the courts and created most of the burdens on industry and commerce which are a well-known feature of the American practice.
Instead, we decided to build on the approach, already embodied in the Fair Trading Act, of taking a broad definition


of anti-competitive pratice and then seeking in each case to establish by a short investigation without sanctions whether a prima facie case of limited competition was evident or not, and if it was, whether it was appropriate for a fuller investigation by the Monopolies and Mergers Commission as a practice which might operate against the public interest. That is the principal basis of the Bill.
What is new in the legislation is that, for the first time, an individual practice by an individual firm can be investigated to see whether it is anti-competitive, and if it is found to be against the public interest it can be stopped. Formerly, it was necessary to involve every firm in an industry in order to decide whether a monopoly situation existed. Furthermore, the Bill allows the Director-General of Fair Trading in his investigation into anti-competitive practice to treat the public sector and the private sector alike.

Mr. John Fraser: Example is always a good educator. Can the right hon. Gentleman say whether these practices would be regarded as referable?

Mr. Nott: I shall come to that point. Clearly the House would like a few examples.
I believe that the new procedures will considerably strengthen competition policy without imposing the uncertainties and burdens on industry of temporary price restrictions and pre-notification, which, of course, were two of the main elements of the Price Commission Act.
I understand what many Labour Members feel about the Price Commission. They feel strongly about it. I suppose I felt the same when HMS "Ark Royal" was towed, with flags flying and hooters hooting, to the breakers' yard in Devonport. I felt a pure nostalgia that a great British institution, our aircraft carrier, had made her last journey. The Conservative Party feels the same pride and affection for the Board of Admiralty and the Royal Navy as hon. Members below the Gangway opposite seem to reserve for the Board of Inland Revenue and the Price Commission. I can understand that, but I think that the difference of view across the House somewhat explains the voting swing of 10 per cent. to the Conservatives from Labour among skilled

and unskilled workers between 1974 and 1979, which is evidence that we now speak for the Labour Party's traditional constituencies.

Mr. Douglas Jay: Do I gather from the right hon. Gentleman's remarks that the Government are proposing to abolish the Inland Revenue also?

Mr. Nott: If it was in my power to abolish taxes I certainly would. I am sure that the right hon. Member for Battersea, North (Mr. Jay) would like to see all taxes go as well. I do not expect quite to achieve that ambition, but it is one that I hope never to abandon. But we are making a good start.
It would, however, be appropriate at this stage for me to acknowledge the final report of the Price Commission, on car spares, published yesterday. My right hon. Friend the Minister for Consumer Affairs and I spent many hours endeavouring to bring forward what is a very good report, and I congratulate the Price Commission on it. I believe that the report demonstrates one of the greatest areas of consumer concern—cars. In passing, may I say that I wish that all husbands in the country treated their wives as well as they do their cars, because the pride of the great British public in their cars is, I think, second to none.
My right hon. Friend and I had a considerable dilemma. We wanted to bring the report forward because we thought it important, but we did not at the same time wish gratuitously to damage British interests. The right hon. Member for Lanarkshire, North, if confronted with that great problem, would have made similar deletions. It would clearly have been better from the consumer aspect had we made none at all, but we felt that we did not want to damage British interests in the process.
The publication of what is a good report is not a reason for keeping the Price Commission in being. Under our proposals, where anti-competitive behaviour exists, the Monopolies and Mergers Commission would not merely be able to expose it but would have powers to deal with it. The Director General of Fair Trading may seek to look into the practices set out in the report. I do not accept the arguments advanced


by the hon. Member for Norwood (Mr. Fraser) on the radio this morning that the abolition of the Price Commission will in any way adversely affect our capacity to make useful reports and investigations.
Mr. Charles Williams, who has now left the Price Commission, his board and all his staff deserve not necessarily our approval of the policies set forth for them by the previous Government—as the House knows, we did not approve of those policies—but they should have the gratitude of the House for conscientiously fulfilling their duties. Mr. Williams handled the difficult task of running down the Commission with discretion and tact, and I am grateful to him.
Clause 2 defines an anti-competitive practice and provides the power to make exceptions. I have it in mind to exclude firms with a turnover of less than £5 million unless they have more than a 25 per cent. share of a particular market, but I do not intend to use the powers to exempt particular areas of industry or commerce in other than special circumstances. Any such exceptions would be far more limited than those in the Restrictive Trade Practices Act. I am concerned with the areas primarily involved with international jurisdiction, and they can be discussed in Committee.
On the subject of the Restrictive Trade Practices Act I should mention that the findings of the court take immediate effect. I propose to amend the powers of the Restrictive Practices Court to enable it, should it so decide, to defer the effect of its declaration so that the parties to a case have time to make revisions in the light of the findings. A revised agreement would then have to be submitted to the court for clearance.

Mr. John Fraser: Are the anti-competitive practices revealed in the report the sort of practice that could be investigated under Clause 2(1)? Is it such a practice that, if carried on by a multitude of persons or companies, could have been investigated by the Price Commission?

Mr. Nott: I do not wish to be drawn into a debate on what is or is not an anticompetitive practice so far as the report is concerned. It will be for the Director General of Fair Trading to make these judgments and not for Ministers. He will have the option of deciding, as he does

now, whether he should refer a particular practice for major monopoly investigation based on the existing Fair Trading Act procedures or adopt the new procedures in the Bill. He will be free to carry out a prima facie investigation into some of the practices illuminated in the report and decide whether they might be appropriate for investigation by the Monopolies and Mergers Commission as being against the public interest.
There are two criteria in the Bill. There is first the question whether a practice is anti-competitive, but it is only if it is acting against the public interest that the Commission under existing legislation will make a recommendation.
Several possible examples of the kind of practice that the Director General might seek to investigate were set out in chapter 6 of the Labour Government's Green Paper. I should make it clear, however, that the decision as to what might constitute an anti-competitive practice that might operate against the public interest is not for Governments but for the Director General of Fair Trading. Consumers and business men adversely affected by what they believe to be an anti-competitive practice must take their complaint to him.
We believe that conduct that imposes a barrier to a new entrant into a market is a good example of a possible anticompetitive practice. Powerful firms may try by certain practices to eliminate competition from small firms. Powerful firms may insist, for instance, that wholesalers or retailers stock the full range of their products so that the wholesaler is unable to stock a rival product. A manufacturer may insist that a stockist does not sell the products of a competing manufacturer. A manufacturer may not allow a retailer to advertise his product except at a minimum price specified by him. I can go on and on. Anticompetitive practices may lie in the conditions of supply, in a refusal to supply or, indeed, in such areas as predatory pricing.

Mr. Tim Sainsbury: Does my right hon. Friend agree that the definition in clause 2 of anti-competitive practice is wide? In Committee we should look at the defences that might appropriately be advanced by those accused of


such a practice and relieve them of uncertainty. A company that is merely pricing competitively may be fearful of being accused of predatory pricing.

Mr. Nott: We are aiming not at a particular practice but at its effect. That is the key distinction. Industry is concerned at the broadness of the definition in the Bill, but I hope that it has taken the point that I made. If we try to set out a full list of anti-competitive practices in a legally defined sense we should have legislation similar to anti-trust legislation in the United States and that in Germany, and that would be a far greater burden to British industry.
I emphasise that the Director General of Fair Trading is merely asked here to carry out a prima facie investigation and not to accuse anyone. There are no sanctions. It will be a quick investigation as to whether he believes the effect of a particular practice might be appropriate for further examination by the Monopolies and Mergers Commission as being possibly contrary to the public interest. Although there is concern, it is not a procedure that will be shown to be onerous or difficult for industry. It can be debated at length in Committee.
Clause 11 introduces new powers for public sector industries. Powers existed under the Fair Trading Act for the investigation of public sector industries, but they were inadequate and never used. If there is a single area of public concern about inefficiency and cost, I believe that it is the large statutory monopolies.
We have widened the definition in the Bill to include the water industry, bus undertakings and the agricultural marketing boards, as well as the nationalised industries which are already dealt with in the Fair Trading Act. We believe that as public sector bodies are not subject to the normal sanctions of bankruptcy, acquisition by other firms and the wider sanctions of competition in the market place, they need to be subject to an investigation of the service which they provide to consumers, the occasional investigation into their efficiency and costs and possibly sometimes the occasional abuse of their monopoly position.
Of course, this kind of inquiry into efficiency and costs, as well as possible abuse of the monopoly position, which

will take six months and could possibly extend to nine months, could have been undertaken by a different body.
We considered the possibility of creating a new body for this purpose. We considered asking the Exchequer and Audit Department to carry out this work but we came back to the Monopolies and Mergers Commission as being the most suitable body in a new form to conduct this kind of efficiency audit. The Commission already has experience of investigating large monopolies and in its new form we thought it would be the best body to build up experience in this very difficult and important field.
I am anxious not to overburden the Monopolies and Mergers Commission immediately with a great weight of new investigation. It must have time to develop its practice and build up experience.

Mr. Hugh Dykes: May I take my right hon. Friend from the public sector back to the industries to which he was referring when the hon. Member for Norwood (Mr. Fraser) intervened earlier—that is, those which practise self-regulation. This is a very important matter because there is a possibility of amending the existing Act to stop a finding from having immediate effect in the court. I welcome that possibility and the Secretary of State's promise to draft an appropriate amendment. For example, if it appears in due course that adequate regulation is put at risk while the Stock Exchange's practices are being investigated, as they are now, will he reconsider the stance he has adopted not to lay an exemption order? The Stock Exchange has already officially requested that this should be done.

Mr. Nott: I realise that this is an important question. I shall come to the Stock Exchange in a moment and answer my hon. Friend's point then. I understand his concern.

Mr. Stephen Dorrell: Could my right hon. Friend deal with the point that I raised in the debate in July when I asked him why the Government want to limit the section 11 powers to the public sector? Are there not also private sector monopolies in which the nation has just as much at stake? Will the Government consider extending that


power to cover some parts of the private sector as well?

Mr. Nott: I noted my hon. Friend's remarks in that debate and I have re-read them. However, if there is a monopoly operating in the private sector it is subject to the existing legislation embodied in the Fair Trading Act. If a particular firm indulges in an anti-competitive practice, it will be subject to investigation under the clauses in this Bill if the Director General of Fair Trading considers that such a situation exists.
In this Bill we are treating the public sector and the private sector exactly alike. I have been asked why we have gone further and instituted what I might call an efficiency audit for the public sector but not for the private sector. The answer to that is exactly as I have just given it. There is a fundamental difference between a statutory monopoly which under legislation normally has been given a right—such as the Post Office, whose monopoly we would like to reduce—and a private sector firm. A statutory monopoly does not have the same sanctions of bankruptcy and it is unlikely to be taken over by a large private firm. Because of the fundamentally different nature of these activities we believe that the additional procedure is required which is not relevant in that sense to the private sector where monopolies do not exist, or if they do, we have procedures for undoing them.
I shall refer briefly to the way in which we hope to strengthen the Monopolies and Mergers Commission. I am trying to develop this speech a little because I was criticised for being brief last time. Therefore, I am anxious now to make a reasonable but not long contribution. I have had a number of talks with the chairman of the Monopolies and Mergers Commission and with his full agreement I hope to appoint one, or, if possible, two deputy chairmen on more of a full-time basis than hitherto. The chairman is also anxious to co-ordinate more closely the several groups working on reports. He is setting up a co-ordinating committee of senior members for this purpose. The Commission has recently recruited a small nucleus of highly qualified senior staff to conduct the new investigations and recently we have appointed a new secretary as the official head of the Commission.
I accept and agree that the new procedures require, in some parts of the Commission's activities, a rather different kind of approach and I believe that the chairman is now moving in that direction.
There is a further point relating to the comments made by my hon. Friend the Member for Harrow, East (Mr. Dykes) about the Stock Exchange agreement, which has been referred to the Restrictive Practices Court under the Restrictive Trade Practices Act. Several months ago the Stock Exchange requested that its agreement should be removed from the scope of the legislation on the ground that the Restrictive Practices Court is not an appropriate body to investigate its activities. There has been a considerable amount of correspondence between Ministers and the Stock Exchange and a great weight of evidence has passed between us.
I regret to tell the House that I cannot meet the request of the Stock Exchange. However, I am concerned that adequate regulation of the security markets should be preserved. I recognise the value of self-regulation in which the Council of the Stock Exchange has a central role to play. I believe that the amendment to the Act to which I referred earlier, and which will give this breathing space following the announcement of the finding by the court, may be of help to the Stock Exchange should the court make certain findings at the end of its investigation. However, the small amendments I am making to the court's arrangements will apply across the board.
We must not assume that the Restrictive Practices Court is not as capable as other bodies of making a sensible finding in the public interest. There has been a feeling that this court will not consider the public interest. We must see what happens. I do not think those fears are justified.

Mr. Dykes: If the principle of adequate regulation to which the Minister has already paid tribute were put at risk by these processes in the months ahead, would he reconsider his decision not to lay an exemption order?

Mr. Nott: The power to lay exemption orders is part of the law. Any Minister is always open to considering anything. I do not intend to lay an exemption order


and I have made that clear. I have said that I cannot meet the request of the Stock Exchange. However, clearly I am always prepared to receive representations about exemption orders, and if some dramatic situation arises I shall be willing to see my hon. Friend at any time.

Mr. Jay: As the right hon. Gentleman has referred to the Stock Exchange, will he make clear how the legislation will affect the professional services generally? Will restrictive practices in the legal or medical professions be covered? If not, how does the Bill exclude them?

Mr. Nott: In the last resort it will not be the judgment of Ministers—they are not excluded. The Director General of Fair Trading will normally consider it more appropriate that professional services such as those referred to by the right hon. Gentleman should be subject to investigations through the existing procedures under the Fair Trading Act and the Monopolies and Mergers Commission investigation. The Director General has the power to use the new procedures, but I believe that he is more likely to use the existing arrangements under which some of the learned professions and others have already been looked into by the Monopolies and Mergers Commission.

Mr. D. N. Campbell-Savours: With reference to clause 11, will the right hon. Gentleman tell me in which subsection I will find a reference to the legal profession?

Mr. Nott: With respect to the hon. Gentleman, I believe that he has the wrong clause. Clause 11 is concerned with what I have described as the efficiency audit of the public sector bodies. I fear that the hon. Gentleman will have to look at the Fair Trading Act, which lists all the bodies. In this measure all we have done is to add the water and bus undertakings and the agricultural marketing boards to a list which is already included in the Fair Trading Act.
I turn to the abolition of the Price Commission. I should tell the hon. Member for Norwood that it is no use searching in our policy for a modified system of price control; it does not exist. Nor does the pre-notification of prices and the associated paraphernalia of a great bureaucracy which employed

over 500 persons and which would have cost nearly £8 million this year and led to countless burdens on British industry and commerce. For what purpose did it exist in the past? The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) assured us that the Price Commission was not an agency for holding down the RPI. Indeed, its powers were limited to deferring price increases and it performed that role successfully and visibly—not for political purposes—in the period leading up to the election.
The previous Government's counter-inflation policy rested not on price control but on voluntary pay controls negotiated with the TUC. The TUC wrote the Government a letter and that letter was incorporated in a White Paper. Through that White Paper the letter from the TUC became the law.

Mr. John Smith: If it is a bad idea to attempt to investigate price increases, will the right hon. Gentleman explain why in clause 13 such a power is included to refer to the Director General an increase in prices? Will he explain to the House what is the point of the Secretary of State having the power to refer a price increase for investigation when it is clear from the face of the Bill that he has no powers to act upon that reference, even if it is discovered to be against the public interest?

Mr. Nott: The right hon. Gentleman asks the question at precisely the right moment. Clearly it is a good question. Clause 13 enables the Government to ask the Director General of Fair Trading to produce a report where, as defined in clause 13, there is a matter of "major public concern" and the Secretary of State considers it to be of general economic importance or special significance to consumers. We do not intend to use that power in any but the most exceptional circumstances. If that power did not rest in the Bill, the power to conduct an investigation of that sort—as the right hon. Gentleman says, there are no sanctions attached to it—would probably be given by any Government to an ad hoc board. If the Government wish to investigate a particular case they will do so. However, I do not want the Government to be in the business of setting up ad hoc boards to investigate matters of this sort. I prefer to keep such investigations


within the context of competition policy whereby no powers, controls or sanctions are attached to the procedure unless the reports produced by the Director General show up evidence of an anticompetitive practice. In that case, the relevant powers of the Bill would apply.

Mr. John Smith: Surely it is an unreasonable price increase which is allowed under clause 13. When the Secretary of State receives a report from the Director General of Fair Trading which states that there has been a totally unjustified price increase, what will he do with the report? Will he paper his bedroom with it? What can he do with it?

Mr. Nott: The purpose of the report is to illuminate the facts. Earlier in my speech I said that if the right hon. Gentleman is looking for a system of price controls and sanctions in the Bill with which he is familiar he will not find it. The reason clause 13 is in the Bill is that, being a realistic sort of chap, I thought that it was better for such an investigation to take place within the context of competition policy rather than by the setting up of ad hoc boards by Governments which would involve conducting such illumination of the facts outside competition policy. However, if it was revealed in the report that an anticompetitive practice existed, the Director General, if he thought it appropriate for investigation—being contrary to the public interest—would refer that to the Monopolies and Mergers Commission for a full report. From that report the sanctions which exist in the Fair Trading Act would flow.

Mr. Ioan Evans: The purpose of the Price Commission was to have price restraint because the Government were seeking wage restraint. Is the right hon. Gentleman saying that if prices increase by leaps and bounds and let rip he will leave the matter to market forces and that the Government will not intervene?

Mr. Nott: That leads me into wider areas. While the hon. Gentleman's Government were in power and we had the Price Commission, prices doubled and the value of the pound was halved. All the bureaucracy existed and the powers for the deferment of prices were there, but is the hon. Gentleman telling the House and the country that that prevented

the industrial chaos of last winter? It had no impact on wage demands.

Mr. Evans: I believe that the problem with the wage demands was that the trade unions responded for three years but the Government asked for too much in the fourth year. That might well have been the mistake that the previous Government made. However, the trade unions did respond over that three-year period because the Price Commission existed. Because of its existence, those manufacturers who wished to increase prices had to refer those increases to the Price Commission. That reference was a restraint in itself. The Price Commission had powers to restrain price increases for at least three months. That is how the inflation rate which had stood at 25 per cent. was brought down last year to an average of about 8 per cent.—half its present rate since this Government removed the Price Commission.

Mr. Nott: I understand that that is the view of the hon. Gentleman, but it does not coincide with the view of the right hon. Member for Sparkbrook, who was the Secretary of State for Prices and Consumer Protection. I have here a copy of an interview that he gave some time ago to Mr. Gordon Leak of the News of the World. The right hon. Gentleman was asked in that interview, which was conducted at the time of the introduction of the Price Commission Act:
Would the price of any product be lower today if these controls had been introduced three years ago?
The right hon. Gentleman replied:
Some prices certainly would, but not overall. Had we had this prices policy a year or two years ago it might have made some marginal difference to the rate of inflation, but it would not have produced a great improvement such as we will have towards the end of this year.
Of course that did not happen. The right hon. Gentleman continued:
That will only come about because of a general economic improvement.
The hon. Member for Aberdare (Mr. Evans) is saying that the trade unions exercised wage restraint for three years and would not have done so if all this paraphernalia had not existed. That is a subjective judgment with which I do not agree. We do not have a structure of the sort that I have just been describing. The TUC has not written the Government a


letter and we have not incorporated it in a White Paper and made it law.
The policy of voluntary wage restraint, which was the key counter-inflation policy of the previous Government—let us be frank about that—was determined to ensure that workers received no more and no less than the letter from the TUC specified, regardless of changing demands, skills and markets. It is that lack of flexibility in the system, of which price controls were a major part, that we are trying to get away from. The previous Government had price controls which did not work and pay controls which led to the worst industrial chaos in post-war Britain. We are espousing neither.
I apologise for the length of this speech—I seem always to be apologising for shortness or length—and I shall come quickly to the place of the Bill in the broader context of economic policy.
I am an understanding person and I appreciate that the Opposition Front Bench feel a deep sense of shock that neither our policies nor the policies of their party conference represent a comfortable and secure resting place. That goes for their parliamentary seats as well.
Following the failure of the botched-up policies of the social democrats who used to occupy the Government Front Bench—the value of the pound halved, unemployment doubled and the national debt virtually doubled—there were only two alternative economic policies. We could not go through again what we went through during the previous five years.
One alternative was for economic policy to follow the route chosen by the hon. Member for Tottenham, who has been joined in the House by an hon. Member of equal intellectual distinction, the hon. Member for Vauxhall (Mr. Holland). That is the route of a much more centrally controlled and regulated economy. The hon. Member for Vauxhall has written a pamphlet which I recommend to hon. Members. It is called "What went wrong?" and is the story of the previous Government. The pamphlet has a picture of the present leader of the Labour Party on the front and the hon. Member for Vauxhall describes the previous Government as
involving progressive liberal welfare statism within the power centres of the system.

The hon. Gentleman's students would drool in admiration at that brilliant Marxist phraseology. I think that what the hon. Gentleman really means is that he wants to do down the former Chief Secretary to the Treasury.
However, that is one logical route—a centrally controlled economy, with planning and the bringing back of exchange controls and price controls and more rules and regulations. It is a logical and consistent economic argument. The only alternative to that is not the botched-up job of the past five years but our policy of greater freedom, less regulation, more choice and fewer controls.
I think that the Government should confine their activities more to those areas of policy where they can be effective. They can restrict the money supply available to finance inflation and can ensure the greatest possible competition and freedom of choice.
At the heart of the Bill lies the fact that the consumer cannot be free to choose unless producers are obliged to compete, and because economic freedom rests on competition the task of grappling with monopoly—the denial of choice—is an important part of economic policy. Indeed, it must pervade every part of it.
The Government intend to stimulate the improvement and performance of our economy by encouraging enterprise, by persuading entrepreneurs to look for new opportunities and by persuading business men to go for new products and to enter new markets. This Bill, which will ensure the denial of monopoly and therefore greater freedom of choice, is central to our objectives and I commend it to the House.

5.7 p.m.

Mr. Dennis Canavan: I have listened with interest and patience to the Secretary of State, but I have listened in vain because I am still awaiting an adequate justification for the Bill. This is the Secretary of State's third effort. When the House first debated the Bill, the right hon. Gentleman spoke for two minutes and sat down like a petulant little schoolboy. When hon. Members ticked him off, he rose just before the debate was adjourned and spoke for 17 minutes. He has just rambled on for more than three-quarters


of an hour, but I am still awaiting a justification for the Bill.
The Bill has nothing to do with creating fairer competition. Its essence is contained in clause 1 which provides for the abolition of the Price Commission. That is what it is all about.
The Price Commission is the only body with the statutory power to intervene in escalating prices. Its abolition was not set forth in the Tory Party manifesto and no commitment to abolish it was made during the election campaign. Indeed, when the right hon. Member for Gloucester (Mrs. Oppenheim) was challenged during the campaign, she prevaricated as usual and said that a Conservative Government would review the work of the Commission. We know now that in the Tory Party a review of work is synonymous with abolition. The abolition of the Price Commission was announced during the debate on the Address and this tawdry Bill was brought before the House shortly afterwards.
It is interesting to note the background to our debate. Inflation is increasing and everyone is rightly concerned about that. The Government inherited an inflation rate of 10·1 per cent. and the inflation rate was in single figures for 15 months before the general election. That is a fact which even Conservative Members would not have the audacity to challenge.
Since the general election inflation has accelerated. When the Chancellor of the Exchequer presented his Budget he said that inflation would probably be at 16 per cent. in October. That was an underestimate because the Secretary of State for Trade told us yesterday that the rate is already over 16 per cent. and there is a possibility that it will reach 20 per cent. by the turn of the year.
Indeed, if this trend continues this Government may become the first in history virtually to double the rate of inflation in their first six months of office. Yet what steps are they taking? They are abandoning their responsibility in respect of controlling prices and abandoning even the pretence of fighting inflation. I do not know where on earth Conservative Members spend their weekends, but when I go around my constituency I discover that even many of those who voted Tory want more State intervention in

relation to prices. They want more Government control of prices, not less. That goes for people such as housewives, those with families and all who are faced with the rising cost of living. Yet here we have this Government, a few weeks after coming into office, dismantling the only piece of apparatus there is to ensure statutory control of prices.
As I said, even the Government's own supporters are beginning to have doubts about the wisdom of their policy. Indeed, The Daily Telegraph—the mouthpiece of the Tory Party—just a few days after the general election, on 26 May, contained an article expressing public concern about price increases in commodities such as milk, petrol and bread. The article went on to refer to the concern of the Paymaster General, who perhaps more appropriately should be called the Minister for Propaganda. Indeed, the right hon. Gentleman has the most difficult job of any member of the Government because he must act as the propaganda Minister for the rubbishy policies that his colleagues produce. In referring to the Paymaster General The Daily Telegraph article said:
Party officials—
that is, Tory Party officials—
told him that the abolition of the Price Commission followed by the announcement of a range of price rises … had provoked an adverse public reaction and called Conservative policy on inflation into question".
It is little wonder that there is concern among even their own supporters, because to my mind a huge section of the public who voted for a Conservative Government were deceived by the propaganda that was put out during the general election campaign.
It would not be so bad if it were just a refusal on the Government's part to intervene in order to stop rising prices, but this is probably the first Government in history actually to intervene in order to increase prices. We need only look at some of the steps that have been taken. Only a few days after the general election they intervened to give permission to Rank Hovis McDougall to put up the price of bread. That was not surprising to some Labour Members because, after all, Rank Hovis McDougall is one of the biggest contributors to the Tory party. We were told by the Minister for Consumer Affairs that this bread price


increase had been allowed because not enough profit was being made. Let it be noted that the Rank Hovis McDougall's pre-tax profit for last year alone was more than £32 million, and the company was able to give £30,000 to the Tory party, £7,500 to the Tory front organisation called the Economic League, and £5,500 to that other Tory front organisation Aims of Industry, now called "Aims".

Mr. Nott: If it is such a dreadful organisation, why did the hon. Gentleman's Government allow Rank Hovis McDougall to put up the price of bread by 1p just a few months earlier?

Mr. Canavan: The fact that the previous Government allowed certain things to happen is no justification at all for the Secretary of State to argue that, because the price of bread had gone up in the past, he should allow another increase. At least there is no unhealthy liaison between the Labour party and the likes of Rank Hovis McDougall with regard to putting money into our coffers. That argument also applies to the brewers. Lately the brewers have been allowed another massive increase and, of course, many of the large brewers are well known contributors to the coffers of the Tory party.
That same edition of The Daily Telegraph to which I referred contained another article about prices. It should be remembered that this was just prior to the Budget. That article stated:
The spiral of price rises bedevilling the first weeks of the Conservative Government took two new turns yesterday, with petrol becoming up to 6p a gallon dearer, and the cost of milk increasing by 1½p a pint. Shell, Esso and Texaco followed the lead set 24 hours earlier by BP and Burmah, bringing the £1 gallon close in many parts of the country".

The Minister for Consumer Affairs (Mrs. Sally Oppenheim): rose——

Mr. Canavan: Perhaps the right hon. Lady will wait for a moment. I am sure that many drivers who unfortunately were deceived into voting Tory now look back almost nostalgically to when they could buy petrol for as little as £1 a gallon, because many are now paying more than £1·20 a gallon.

Mrs. Oppenheim: Is the hon. Gentleman aware that the petrol increases about which he complained were allowed by the Price Commission?

Mr. Canavan: We have heard all this nonsense before about so many price increases being in the pipeline. Had this Government been determined to tackle the rise in prices as soon as they got into office, they could have stopped that pipeline. The reason why they did not was that the pipeline was shovelling money into the coffers of the Tory party and its friends.

Mr. Ioan Evans: It is not just a question of the petrol companies, because in the Budget this Government deliberately put a tax of 10p on a gallon of petrol. That was not a Labour pipeline: it was a Tory pipeline, and every time someone buys a gallon of petrol he now pays 10p tax to the Tory Government.

Mr. Canavan: I am grateful to my hon. Friend. In fact, he has anticipated my next point, because my notes read "petrol duty and VAT". A few days after the publication of that article in The Daily Telegraph we had the Budget. As my hon. Friend said, the Budget raised the price of petrol even more—if one likes, by State intervention—by imposing a higher petrol duty and a higher rate of VAT. Of course, the latter had a devastating effect on the rate of inflation, not just on goods such as petrol but on many other household goods and services that are important to practically every family, in the country.
Yet during the general election campaign the Daily Mail—another Tory propaganda sheet—contained an article headed "Labour's Dirty Dozen". That article, which appeared on 26 April, claimed that the Labour Party was telling 12 lies during the election campaign. I should like to refer to alleged lie number four, where the article stated:
'To pay for income tax cuts the Tories would have to double VAT on clothing, shoes, essential kitchen goods, furniture, cars and so on'—Mr. Callaghan, April 23.
TRUTH: 'We will not double it'—Mrs. Thatcher.
We have now been told that an increase from 8 per cent. to 15 per cent. is not really doubling. How pedantic can one get? Very well—instead of multiplying by two the Tories have multiplied


the figure by one and seven-eighths. I and my colleagues are not thick. We all understand arithmetical niceties. We did not have the disadvantage of going to fee-paying public schools that cannot teach adequate arithmetic. Any statistician would be able to say that an increase from 8 per cent. to 15 per cent. is tantamount to doubling the rate of VAT.
I turn to another act of deceit that was committed during the election campaign, shortly after a Labour broadcast when Shirley Williams listed price increases on various goods and services that would automatically follow if a Tory Government were elected. The Chancellor of the Exchequer then said:
Shirley Williams's figures have no basis in reality. She was assuming that VAT goes up to 15 per cent.
In other words, the Tories virtually denied during the General Election campaign that they would put up the rate of VAT to 15 per cent. They have not yet stopped this process of State intervention to increase prices. The next step will be devaluation of the green pound. They will be under tremendous pressure from the farming interests. There are many farmers on the Conservative Benches and farmers in the Cabinet. It will not require a great deal of persuasion to achieve a massive devaluation in the green pound which will increase the price of food despite the fact, as the Financial Times revealed recently, that the average family budget over the past year has increased by 15 per cent.
It is clear to me that this Government have abandoned all responsibility in the battle against inflation. Indeed, at Question Time yesterday my right hon. Friend the Leader of the Opposition asked the Minister for Consumer Affairs if it was her party's policy to reduce inflation to single figures. He is still awaiting an answer. So is the House awaiting an answer. Is it the policy of the Tory Party at least to try to reduce inflation to single figures? What is the timetable? How on earth do they hope to achieve this by abandoning any form of price control? I am beginning to wonder, if this Bill is passed tonight, whether there will be any Ministerial responsibility for price control. We know already that the right hon. Lady has been reduced to the ranks. She hoped to get a place in the Cabinet, but the Prime Minister says that one woman

in the Cabinet is enough. Some would maintain that one like the Prime Minister is one too many. The hon. Member for Rochester and Chatham (Mrs. Fenner) is objecting because she is another ambitious lady.
The point is that there is no spokesman, male or female, in the Cabinet with responsibility for fighting inflation and rising prices. In the last Government, the Secretary of State for Prices and Consumer Protection was a member of the Cabinet. Now the right hon. Lady who hoped to succeed has been reduced to the ranks. That is perhaps a measure of the lack of importance which this Government attach to the matter.
I would like you, Mr. Deputy Speaker, to pass on the following remarks to Mr. Speaker. If the Bill is passed tonight an eventually becomes law, will the Table Office be allowed to accept questions from us about rising prices? Will we be able to table questions to a Minister about the rise in the price of coffee, beer, bread or fares? Or will such questions be blocked at the Table Office? It would be helpful if we could hear a reply from Mr. Speaker about how the rules of the House can be adapted to the changing circumstances of the Bill if the measure is passed tonight and eventually becomes law.
The Secretary of State claimed earlier that the Price Commission had not helped in the battle against inflation. I admit that it was not strong enough. But it was the only weapon available. I maintained consistently during the last Parliament that the weapon should be strengthened. Yet the Government are discarding it completely. Our manifesto promised during the election to strengthen the powers of the Price Commission. But even in its inadequate existing form it provides some control and even a temporary freeze power in certain situations. Also, it has the power to give information to the Secretary of State, to Parliament and to the country. Probably the last report the Commission will make was published yesterday. It dealt with spare parts for motor cars. The report states clearly that the exclusive franchise system operates against the consumer. It also says:
We found instances where the manufacturing costs were less than a quarter of the retail price".


What will happen about that report? In the summary at the front of the report I counted 144 paragraphs almost half of which were marked by an asterisk. The asterisk means that in the Secretary of State's opinion it is contrary to the public interest to reveal the information. The onus is on the Secretary of State to tell the House why he thinks that. Many members of his party in the last Parliament. like myself, supported the idea of freedom of information, including a Freedom of Information Act. Yet here we have an absolute travesty of freedom of information.
Within the first few months of this Government's period of office, this report is published, with the Secretary of State putting his blue pencil of censorship through almost half the paragraphs in the summary. My fear is that this report, some of which is interesting and useful, will simply be referred to the Director General of Fair Trading who will allow it to gather dust on the shelves and nothing will be done despite the clear injustices to which the factual part of the report refers.
It is clear from the Secretary of State's speech today that the Government are abolishing the Price Commission for doctrinaire reasons. They claim that prices can be magically controlled by returning to competition within an unbridled free market economy. They claim that price control is irrelevant to the battle against inflation. What this competition within a free market economy has achieved as regards the growth of monopoly makes me shudder. It should make us all shudder. In 1950, the top 100 manufacturing companies in this country represented about 20 per cent. of the output. Twenty years later, the top 100 manufacturing companies represented about half of the output and that trend is still increasing. There is also a deliberate price-fixing mechanism within companies and groups of companies.
I am not talking only about international price-fixing rings such as OPEC over which we have little or no control. There are others over which we could take control. There was the case of Pirelli last year, a well-known company which was involved in a price-fixing ring which deprived the Post Office of £9 million. Who was the chairman of Pirelli

at the time?—the chairman of the Tory Party. Do we seriously expect people like that to be in the forefront of the battle against inflation?
The Tory Party is far more interested in filling the pockets of big business at the expense of ordinary working people and their families. Its doctrinaire monetarist policy represents a two-pronged attack on working people in an attempt to make them the scapegoats for inflation that they did not create and in an attempt to sacrifice them to defeat that inflation.
This monetarist policy, on the one hand, means savage cuts in public expenditure in housing, health, education and other essential social services and now, in the second part of the two-pronged attack, allows prices to escalate so that people have to pay more for food, clothing, heating and transport and virtually everything else essential for themselves and their families.
The only people who will benefit from this squalid Bill are the profiteers and the racketeers. For the vast majority the Bill represents yet another attack on their living standards. That is why I hope that the House will reject the Bill.

5.30 p.m.

Mr. Michael Shersby: I always enjoy the speeches of the hon. Member for West Stirlingshire (Mr. Canavan). He delivers them with his tongue in his cheek. I can only believe that he lives in a totally unreal world. It is extraordinary that the hon. Gentleman should make such remarks without reference to the substantial cuts that have already been made in taxation or without reference to the substantial increases in the retirement pension and other pension benefits which amount to an increase in expenditure of over £2·7 billion in the coming year. The hon. Gentleman's remarks should, therefore, been seen as nothing more than a rather poor attempt to discredit an important Bill.
There is only one way to keep down prices in the high street—by competition in the shops and between manufacturers. That is more successful than any artificial Commission such as that which existed recently and which cost about £8 million a year to administer. How much better


it would be to spend that money more efficiently.
I hope that my right hon. Friend will be able to give me one or two assurances about matters which should be considered in Committee. I turn first to the question of the determination of the public interest. I am sure that my right hon. Friend will understand my uneasiness about the concept that a nonelected, non-judicial body, however eminent, should be entitled to determine what is the public interest. The advice of such a body would be useful but determination of the public interest should be for Parliament or the courts.
I am particularly worried about clause 7(6) of the Bill. I hope that the Secretary of State will consider introducing a wider interpretation of the public interest beyond those matters listed in section 84 of the Fair Trading Act. They were intended to guide the Commission when determining whether a particular matter operated against the public interest. They represent an attempt by Parliament to establish parameters of the public interest in the context of consumer protection. I believe that the public interest extends beyond consumer protection.
According to the explanatory memorandum the Bill
provides for the selective investigation and control of practices which restrict competition.
I cannot accept that the public interest in regard to these practices should be considered to be no wider than that which relates to the narrow concept covered by the Fair Trading Act. That should be examined.
The Commission is enjoined to have regard to the desirability of five specific conditions. Three involve the promotion of competition, one the promoting of consumer interests and one the maintenance and promotion of a balanced distribution of industry and employment in the United Kingdom.
I am disappointed that there is no suggestion in the Bill that the maintenance of viable manufacturing industries is an essential element in the public interest. I am sure that that must be in my right hon. Friend's mind.

Mr. Nott: I hope that my hon. Friend appreciates that if we were to accede to his request we should have to abandon

all our existing monopoly legislation and take everything into the courts. That is a consistent view but his suggestion would lead to us being involved in the same procedures as in the United States with antitrust legislation. Is that the way that my hon. Friend wishes to go? It would be a big step for us to take.

Mr. Shersby: We should certainly examine this in terms of competition policy. I sincerely believe that the determination of public interest is such an important matter that it is not easy to accept that it should be the responsibility of a body such as that proposed. Perhaps it might be better if the courts determined the public interest since they operate independently and impartially.
There is no suggestion in the Bill that the proper interests of industrialists are as important to the general welfare of the country as those of consumers, although I am sure that my right hon. Friend is concerned about the welfare of industry generally. I am particularly worried about that omission.
The long-term viability of industry is essential to the public interest. My right hon. Friend might consider that the obligation upon the Commission to take into account all matters which appear to it to be relevant will ensure that the Commission is mindful of such matters but there is no guarantee of that.
Clause 7(6) of the Bill should not refer simply to section 84 of the Fair Trading Act but should, in addition, require the Commission to take account of the contribution which the body concerned makes to the public interest in the long term. Clause 11(4) would then also have to be re-examined.
There is genuine anxiety about the lack of a right to appeal by companies which are not satisfied, first, with the reasonableness of the Commission's conclusions and, secondly, with the recommendations made as a result of the Commission's investigation.
There is no mention of the Commission's report being made available to the bodies which have been investigated. It is possible that a company might be accused before Parliament of acting against the public interest without that company knowing the interpretation of the


public interest upon which the investigation was based and without the opportunity to contest that interpretation.
If a company were not asked for an undertaking under clause 9 it could be accused of acting against the public interest without pre-knowledge of the accusation and when it believed that it was doing no such thing.
There is no opportunity for a company to challenge possibly unjustified charges in advance of those charges being published. That is not in accord with most concepts of justice. Innocence should be assumed until guilt is proved. In a climate which could in the future be politically hostile to business, my right hon. Friend must concede that accusations could be made on contestable grounds.
I hope that provision will be made for a copy of each report by the Commission made under clause 8(1) to be sent to the body which is under investigation and for that body to have the statutory opportunity, within a given period, to make representations to the Secretary of State about the effect of its operation on the public interest. I hope also that the Bill will provide that the Commission's report should not be laid before Parliament, and thereby be made public, until these representations have been considered and that the Secretary of State should be required to inform Parliament of the gist of those representations when the matter is eventually laid before Parliament.
Clause 13 of the Bill provides power for the Secretary of State to direct the Director General of Fair Trading to investigate prices, or charges, of a major public concern. My right hon. Friend has already dealt with that clause in his reply to an earlier intervention. It would be most desirable for any undertaking where these powers were to be used—before that direction was given under this clause—to have the opportunity of being consulted. In the past there has been considerable consultation between the Secretary of State and industry in general. I hope that that will continue and will be a prerequisite whenever it is felt necessary to operate the powers under clause 13.
My right hon. Friend has made it clear that he expects to use those powers very rarely, if at all. I warmly welcome that

and entirely accept his assurances on that point, but I suggest that such restraint by future Secretaries of State could not necessarily be assured. I hope, therefore, that an undertaking to the effect that prior consultation would take place, if ever clause 13 was used, could be written into the Bill. That would be an improvement and would be welcomed by industry.
I welcome the Bill in general, and I hope that my right hon. Friend will not feel that I am in any way carping or complaining about its general tenor. On the contrary, I think that it is one of the most important steps he has taken in this Parliament to dismantle an apparatus which was entirely bogus in its operation, which did not succeed in keeping prices down and was merely part of the illusion used by the last Labour Government in an attempt to delude the electorate as prices doubled during their administration. I wish him success in carrying the Bill through swiftly and putting it on the statute book.

5.42 p.m.

Mr. Ioan Evans: I oppose the Bill. This has been an interesting adjourned debate because we have seen the need for the Government to give active support to some kind of Price Commission as a result of what has happened during the Summer Recess. I am sure that the Minister approaches the Bill with mixed feelings. During the time I have been in this House I have never attended a Second Reading debate where a Minister made a two-minute speech at the Dispatch Box and then sat down as though he were not quite sure that he was doing the right thing.
After that two-minute speech—during which the Minister never spoke about the principles of the Bill—he joined in at the end of the debate and instead of addressing himself to the terms of the clauses he gave a reply to what hon. Members had said about the Bill. That was a task which, one might think, should have been given to the Minister for Consumer Affairs.
This is a difficult measure. The promise to abolish the Price Commission was not made to the electorate during the election campaign. Time and again members of the then Opposition stated that they had no intention of removing the Price Commission. According to the


Tory manifesto it was intended to review the workings of the Commission. A review does not imply abolition.
We returned to the House and looked for any mention of a review in the Queen's Speech. There was no mention of it. The Prime Minister came to the Dispatch Box saying, as an aside, that the Price Commission was to be abolished. It was a sad thing because the Price Commmission was not set up by a Labour Government. It was set up by a previous Conservative Government. When we were previously in difficulties with inflation, a Tory Government, between 1970 and 1974, printed money to get us out of our difficulties. The Tories wanted to be seen then to be doing something about prices. So the Price Commission and the pay code were set up by a Tory Government. The Labour Government carried on with the Price Commission, and one could argue that more might have been done to deal with prices. We must recall that prices in this country are not wholly and completely determined by Governments. There are other external factors. The last Labour Government lived through a period when there was a 400 per cent. increase in the price of oil. Did we see any recognition from the Tory Benches at that time that the Government and the nation were facing problems because of that 400 per cent. increase?
We were told that all our problems were due to Socialist policies. I wish that Socialist policies had been pursued by the Labour Government. I feel that their policies were not Socialist enough. For a long period of that Parliament we were dependent upon Liberal Party support. The Labour Government had no majority. In an attempt to deal with prices and inflation, the previous Government sought to restrain wage demands.
We have recently seen the examples of wage settlements in ITV and The Times. I do not know whether the Government are concerned about the percentage increases that have been agreed in both cases. From what I hear in this debate, the Government are not concerned. They want market forces to operate. If those employed in ITV can, quite justifiably, point to the massive profits being made by the independent TV companies, they are entitled to say

that it there is to be a free-for-all and vast profits are to be made, they want a share of them. Those workers are, therefore, putting in for substantial wage increases.
What are the Government doing? They are sitting on the sidelines. Soon we shall have demands from workers in local government. They, and lower paid workers, will soon be making applications and the Government will be involved. Will the Government say that local authority workers are not to have any, or only minimal, increases? It has been leaked out that the Secretary of State for Industry has said that the going rate is 17½ per cent.—that inflation is at 17½ per cent. and that workers are, therefore, justified in putting in for a 17½ per cent. wage increase.

Mr. Anthony Beaumont-Dark: My right hon. Friend said nothing of the sort. One can listen only to so much of this rubbish. It is a complete travesty of what the Minister said. Where is the money to come from? The hon. Member for Aberdare (Mr. Evans) talks of prices, but how can we force people to produce if producing sends them bankrupt? That is typical of the rubbish which led to the downfall of the previous Labour Government.

Mr. Evans: We can analyse why the last Government were defeated. The Tory Party promised that it would reduce the cost of living—though it has since pursued deliberate policies aimed at increasing the cost of living. This has made the vast majority of people in this country feel that they have been greatly cheated. The biggest "con" trick ever perpetrated on the people of this country is represented by the policies being pursued by the Tory Party.
The main question is whether the procedures in the Bill will be better than those already operated by the Price Commission. The Bill proposes a two-stage investigation procedure aimed at competitive prices. If in the first stage of the investigation the Director General obtains information which shows that an anti-competitive practice is being followed by a business, he can seek an undertaking from the business that the practice will cease.
Failing receipt of a satisfactory undertaking, he can make a competition reference to the Monopolies and Mergers Commission. If, following the receipt of this report, an anti-competitive practice is proven, the Secretary of State may make an order prohibiting the practice or remedying its adverse effects.
The Price Commission's investigations were aimed at determining whether prices or profit margins were reasonable in the light of certain criteria. There are seven such criteria. The first is an allowance for costs unavoidably incurred in the efficient supply of goods and services, taking account of the maintenance of the value of the business. The second is the encouragement of the reduction of costs by improving the use of resources while ensuring that the consumer shares in the resulting benefits. The third is the earning of profits giving a real rate of return on capital employed sufficient to meet the costs of finance, including compensation for the business risk, and to sustain investment in expansion and the creation of technical improvements. The fourth is the maintenance of quality and the satisfaction of changing consumer demands for goods and services. The fifth is the encouragement of competition as a contribution to price stability or, where competition is unavoidably limited, the protection of the consumer from the abuse of market power. Sixth is the promotion of equilibrium between supply and demand and the avoidance of serious shortages or adverse effects on the balance of payments. The seventh criterion is the maintenance and expansion of the British share of world markets.
The proposed procedures in the Bill, which abolishes the Commission as set up by the previous Conservative Government under good and fair criteria, are far too narrow. Is it inconceivable that a company may not be engaging in an anticompetitive practice but simply may be inefficient? Equally, is it to be considered an anti-competitive practice if a company engages in profiteering? The Price Commission's terms of reference allow for a far more positive contribution to improving the British economy than do the new terms of reference which are to be given to the Director General of Fair Trading.
The Bill assumes that the presence or absence of competition is the main determinant of price, but that is wrong. Scale inhibits the entry of new firms to certain sectors. Reports of the Monopolies and Mergers Commission in the past have concluded that a monopolistic or oligo-polistic situation in the home market may be in the best interests of exports. In other words, large scale is necessary to compete in world markets. The ethic of the Bill is that so long as a firm is competitive, as determined by its critereia, it is quite irrelevant how it goes about pricing its goods and how often it raises its prices.
Prices are an inherently inequitable and socially divisive allocatory mechanism. If the prices of goods are increased not everyone can afford to buy the goods—for example, people on fixed incomes, pensioners, students and so on. Price increases make no difference to the people who before the Budget were paying 83 per cent. in income tax and are now paying only 60 per cent. Such people are not so concerned about price increases. The ethic of the Bill, therefore, is to those who have will be granted choice, while those who have not will have no choice.
Where goods are in short supply increased demand can only bid up the price. The truth of that fact is writ large in the spiralling of petrol prices in the past few months. In such cases we need not more competition but planning—a system which has socially just priorities with supply allocated according to the priorities. In other words, we need enlightened intervention in the economy, not simply less intervention.
The Government have announced two measures for the investigation of public industry. The first concerns the railway monopoly in commuter traffic in London. I do not know what proposals for competition the Government have in mind. Is another railway to compete with British Railways? I am pleased to see the Minister shake her head and indicating, apparently, that that is not to be the case. The railways always have had a monopoly.
The second aspect concerns the Post Office, and that reference is causing deep anxiety among Post Office workers. I believe that it will also cause deep anxiety among users of the Post


Office service. I have a lengthy letter from a group of workers belonging to the Post Office Engineering Union. They say
It is right that a critical eye should be passed over the Post Office. The Post Office is a publicly owned corporation and should be accountable to the consumers it serves. But criticism should be informed and constructive, and much of the criticism aimed at the Post Office is neither. The Post Office is only 98 per cent. perfect "—
that may be a bit of an exaggeration—
but we believe that the services it provides are very impressive and are improving all the time. The members of my branch, in common with the Post Office workers, are saddened by the regular and inaccurate attacks made upon them. It is because of these attacks that the Government have referred the Inner London postal monopoly to the Monopolies Commission. The postal monopoly is in good hands. To end this monopoly would damage the Post Office seriously, permanently and to the detriment of consumers and employees.
I believe that that is right. The Post Office service has always been in public ownership. Are the Government now suggesting that a separate postal organisation should work in competition with the Post Office? Or do they propose that the more profitable sectors of the Post Office, such as in the inner London area, should be hived off to private enterprise, leading to the stupid situation of half a dozen postmen employed by different postal authorities, some of them in the private sector, covering the same ground?
The Government are living in cloud-cuckoo-land if they think that competition at home will solve the problems that face us abroad. British Airways, for example, faces sufficient competition internationally. It will be a backward step if the Government now seek to hive off certain sectors of the airline and hand them back to private enterprise which will exploit them, contrary to the interest of the consumer.
There is also the example of the Post Office. There are Labour Members who believe that the postal service and the telecommunications sector should be separated. But do the Government propose that the labour-intensive postal service should be retained in the public sector while the highly profitable, increasingly mechanised telecommunications side is handed to private enterprise on a plate to enable speculators to make vast profits?
There is a tremendous move by the Government to sell off vast areas of the public sector. Those assets are owned by the British people. During the past year the Post Office made a profit of over £350 million—£1 million profit a day coming back to the British people through the Exchequer. Now the Government, with all the financial support of big business, are considering carving it and other public enterprises up to hand over to private enterprise. That is what the Bill is partly about.
I do not believe that the Bill will be defeated tonight. There are numbers, if there are no arguments, on the Conservative Benches. I hope, however, that before this Session is out the Government come to realise that they cannot allow market forces to determine prices and wages. They may have to introduce another Bill, just as the Conservative Government did in 1970–74 in connection with the Price Commission. I hope that when the Minister replies she will bear that in mind, because so far she has not played a good part in defending the consumer, although that may be no fault of her own. She was a Shadow spokesman on prices, but it is not her fault that the consumer affairs Department has been abolished.
The Government will not intervene in in prices. We heard from the Secretary of State that prices may rip. Companies will be free to increase the price of their products and we shall depend on market forces to determine the price of an article. I believe that the Government will regret the words they have uttered in the debate. They will come forward very soon with a measure to restore the Price Commission although the replacement body may have a different name. A good Government who are concerned with the interests of the consumer have to intervene rather than allow market forces to permit prices to rip.

6 p.m.

Mr. John Fraser: First, congratulate the two hon. Members who made their maiden speeches in a debate that has been spread over three months. My hon. Friend the Member for Glasgow, Govan (Mr. McMahon) made a passionate and forceful speech about not the Bill but his constituency. My hon. Friend made no apology for doing so. Bearing


in mind what has happened since the Government took office, his constituency will need such a champion.
The second maiden speech was made by the hon. Member for Loughborough (Mr. Dorrell). It was an impressive and thoughtful speech and extremely realistic. It was along the lines of the speech of my hon. Friend the Member for Aberdare (Mr. Evans). The hon. Gentleman said "If I am involved in politics for any length of time, the chances are that at some time in my career I shall vote for price control. I shall not lay down hostages to fortune." The hon. Gentleman may find that we are rather nearer to fortune taking a hostage than we were in July.
It is extraordinary that in July, when we started the Second Reading, the rate of inflation was 11·4 per cent. After a further three months of Conservative Government, and towards the end of Second Reading, the rate is 16·5 per cent. Is there any precedent for the rate of inflation increasing by almost 50 per cent. during the Second Reading of a Bill designed to abolish any form of price control? It is an extraordinary situation.
That situation is matched only by the extraordinary speech of the Secretary of State on the first day of the debate. On that occasion he treated the House with discourtesy and contempt. We have cause to worry about that attitude and the discourtesy and contempt with which he now treats consumers. In a rather lengthy speech today the right hon. Gentleman said, in effect, that he abdicates any possible responsibility for the control of prices apart from the operation of competition. He seems to have gone out of his way in the past few days to abuse consumers. He has talked about arrogant consumerism and referred to price control as bureaucracy and bumf.
The right hon. Gentleman means what he says about cutting out verbiage. He has certainly cut out some verbiage from the report on the manufacture and distribution of car parts. In a report which is its swan song the Price Commission stated:
In practice the exclusivity of supply of car parts resulting from the vehicle franchise system is an unreasonable restraint on competition and is a matter which ought to be rectified.

That is adequate evidence that the Commission dealt with anti-competitive practices. In fact, it developed an extremely good system for rooting out practices that operated against competition.
The car companies should have been competing against one another. We are not talking about a monopolist. A number of car manufacturing companies should have acted competitively and they did not. It is the production of reports such as the one on the manufacture and distribution of car parts that makes me regret the passing of the Price Commission, or more particularly the passing of the Commission's powers.
I should not object to the abolition of the Price Commission if its powers, responsibilities, investigative techniques and ability to act quickly were to be transferred to another body. In fact, such a transfer was under consideration when the previous Administration left office. It is a great mistake to abolish all the Commission's power and expertise. The right hon. Gentleman, who cannot be bothered to listen to speeches and who cannot be bothered to make them on occasions, put his blue pencil through the report.
One of the most interesting parts of the report is found on page 83. The Commission stated:
We therefore illustrate the major types of pricing behaviour found.
There are a number of illustrations, but paragraphs 8.11, 8.12, 8.13 and 8.14 are asterisked. The report continues:
Any understanding of why the differentials we have illustrated"—
I shall not read any further. There has been an extraordinary degree of removal.

Mr. Nott: The hon. Gentleman is being silly.

Mr. Fraser: The right hon. Gentleman says that I am being silly, but I was responsible for a long period for studying Monopolies and Mergers Commission reports and Price Commission reports and for approving deletions. I cannot remember any occasion when we exercised responsibility for confidentiality and went to the degree of excision which the right hon. Gentleman has exercised.

Mr. Nott: rose— —

Mr. Fraser: No, I shall not give way. The right hon. Gentleman had about an hour and I shall have my turn. He will


have a chance to advance his argument on another occasion.

Mr. F. A. Burden: Why does not the hon. Member for Norwood (Mr. Fraser) give way?

Mr. Fraser: I shall exhibit the degree of bad temper that the right hon. Gentleman displayed at the beginning of the debate.
The purpose of the Bill is to abolish the Price Commission and to substitute a small amount of window-dressing. The Bill has a great deal to do with the inflation prospect. I wish that we knew what the inflation prospect was. The Minister for Consumer Affairs was not able to say anything about it yesterday. She was pressed by three hon. Members, including my right hon. Friend the Leader of the Opposition. She was asked to tell us when we would return to single-figure inflation. She said that she could not make wrong forecasts. When she spoke from the Opposition Front Bench she used to boast a great deal about the ability of the then Opposition to make forecasts. On one occasion she said:
may I offer him the services of the Conservative research department statisticians to explain … why my forecasts … are proving right and his are proving wrong?"—[Official Report, 5 March 1979; Vol. 963, c. 887.]
The right hon. Lady has the advantage of the statisticians at Conservative Party Central Office as well as the advantage of the Government's statistical service. However, she has become shy. The boasting has ceased. She cannot tell us—I am willing to bet some money that she will not tell us—when inflation will return to single figures. If she cannot do that, perhaps she will give us a categorical assurance that inflation will not reach 20 per cent. within the next six months. Perhaps she is able to give us that sort of assurance.
The Bill is directly relevant to the inflation prospect. Inflation is a serious enemy. That is recognised by all right hon. and hon. Members. It is an enemy of full employment. It is an enemy of our competitiveness and the value of our currency. It is an enemy of social stability itself.
We all know that there is no single cure. The control of money supply, a monetary policy, or anything of that sort,

is not in itself a cure. There is no one cure for inflation. We all know that there is no single cause of inflation. As the previous Administration learned, the problems of inflation are extremely difficult to tackle. Some of the causes are beyond our control. If there is an oil price rise or a raw materials price rise in imported goods, there is little that we can do. Imported costs are an element in inflation as are wages. The value of the pound can be an element in inflation for good or evil according to whether the value of our currency increases or decreases. Interest rates have an effect on inflation. We cannot legislate inflation away. The one area where we can have some responsibility is price control and the control of monopolies and anticompetitive practice, and the Government are choosing to abandon one of the methods of controlling inflation.
I agree that the value of the Price Commission could never be measured by the specific prices that it froze. I agree that we cannot measure the value of safety legislation by the number of prosecutions that take place. However, the existence of the Commission had two overwhelming advantages. The first advantage was that the mere existence of the power to investigate prices acted as a deterrent. Indeed, that was one of the accusations made by the right hon. Lady. The mere power to investigate acted as a deterrent to those who would seek to exploit consumers.
The value of the Price Commission could not be measured by the number of times that it or the Secretary of State exercised its powers. Its real power was measured by the number of times that firms did not apply for a price increase because they did not want to be held publicly to account. There was real value in the number of times that it did not have to use its powers.
That was the first overwhelming advantage. The second overwhelming advantage of the existence of the Price Commission was that it demonstrated that Governments were concerned about prices and were prepared to do something about them. When the Government talked about the restraints on companies and trade unions—a difficult task—and when they undertook the job of discussing the


inflation prospects with both sides of industry, they had something to offer in return. They were able to offer their own power to control prices.
The repeal of price controls is not merely the elimination of bumf and bureaucracy. It is much more than that. It is total abdication of a responsibility. This is what the Government are saying: "The era of co-operation and discussion with the trade unions, in particular, has disappeared. From now on we are declaring a holy monetary war upon the ordinary working people of this country." However, once the Bill becomes law the Government will have abandoned their ability to carry out their side of the bargain.
The second matter I want to examine is the effect on competition of abolishing the Price Commission. Firms which genuinely competed—there are many sectors which genuinely compete, especially the food retail sector, which is a fine example—had nothing to fear from the Price Commission. Firms that genuinely compete have nothing to fear from the Bill. The firms that must worry are those that do not compete. All the evidence of Price Commission reports is that the Commission intervened when competition was not working or could not work. Most of the work of the Commission is about noncompetitive situations—I refer to the latest report—where there should be competition but it does not exist. As a result of its investigations, the Price Commission stung the brewers, the bakers, the bankers, the biscuit manufacturers and many others, including the friends of the Tory Party and the monopolists. It acted effectively. The most serious allegation that the Conservative Party could make against the Price Commission was that it did its job and was effective and speedy in doing it. That is why it is for the chop—because the Commission had the impertinence to challenge the power and prerogatives of big business, especially the monopolies.
The idea that competition alone can restrain prices in the private sector as much as in the public sector is a nonsense and a myth. Let me give one example from the review of monopolies policy, to which the Minister referred.

By 1968—circumstances have changed much for the worse since then—the five largest firms accounted for 90 per cent. or more of the domestic net output in nearly one-quarter of all separately identifiable product groups. That is one example of the existing degree of concentration.
It is well known that the 100 largest firms in the country account for about 50 per cent. of all United Kingdom manufacturing output. Even as long ago as 1972 they accounted for 36 per cent. of employment in the private sector. There cannot be perfect competition in those circumstances. We must have a body that intervenes and brings public accountability to monopolies and concentrations and those circumstances in which competition should, but does not, work.
I welcome some of the provisions of the Bill, such as those for anti-competitive practices. However, they are not an adequate substitute for the present powers. Nor is the existence of the Monopolies and Mergers Commission an adequate substitute. Time and again the Minister reverts to the argument that, if we do not have the Price Commission but discover that a monopoly is making a monopoly profit, we can refer it to the Monopolies and Mergers Commission. However, that is a grossly unsatisfactory alternative.
I give one example comparing the work of the Monopolies and Mergers Commission and the Price Commission. British Gypsum Limited has a complete monopoly of gypsum-based products, including plasterboard. As a monopoly in that area it was referred to the Monopolies and Mergers Commission on 4 September 1972, after about three or six months' consideration by the Government. The Director General of Fair Trading did not exist then. The report of the Commission was published on 21 January 1974. Taking the period of investigation and selection before the investigation, and negotiation after the investigation to obtain an undertaking, a period of something like two to three years elapsed for the Monopolies and Mergers Commission investigation of British Gypsum Limited. The only recommendation was an end to delivered prices.
The Price Commission also looked at British Gypsum Limited. It described


British Gypsum Limited, as did the Monopolies and Mergers Commission, as a complete monopoly. However, it was able to investigate the price structure of British Gypsum Limited within three months. On the one hand, the Monopolies and Mergers Commission took three years, but the Price Commission, dealing with exactly the same firm and phenomenon, took three months. If I must say which process involved bureaucracy and bumf, I would use those words about the operations of the Monopolies and Mergers Commission, not about the Price Commission.
If there was a price abuse by a monopoly there was neither benefit nor relief for the consumer during the entire period of the investigation. Indeed, it was only some months after the report was published that there was any relief. On the other hand, where there was a Price Commission investigation there was a freeze at the beginning of the investigation, subject to interim price rises, and the possibility of an immediate freeze or restraint on prices immediately after the publication of the report. I could make other comparisons. However, I shall not detain the House with them. That demonstrates that in many situations the Price Commission was far more effective and rapid in dealing with a monopoly situation.
It is not only monopolies that we must worry about—it is all those situations where there should be but is not competition. For instance, there was a Price Commission investigation into funeral charges. There are many funeral directors who should be competing against one another. In fact, the Price Commission discovered an umbrella prices arrangement. The human circumstances of paying for a funeral mean that competition does not operate. When someone dies one does not go from one funeral parlour to another obtaining quotations. The person who seeks a quotation is often sad and bereaved. He does not try to obtain quotations. The answers to that problem flowed from investigations into price displays and quotations.
I cite the case of domestic television rentals. Six large firms are involved. There should be massive competition between those six leading firms, with 58 per cent. of the market between them. However, they did not behave in a competitive

way. Time and time again we see such price parallelism.
I cite an example where competition does not work but where there could not be a monopoly reference. I refer to footwear. The largest footwear outlet—the British Shoe Corporation—controls, according to the Price Commission, 20 per cent. of the market. There is no possibility of a Monopolies and Mergers Commission reference there as the firm does not enjoy a statutory 25 per cent. control of the market. However, the Price Commission discovered that competition was not working as it should. As a result of the report on retail footwear we were able to negotiate changes in recommended prices and prices charged to bring about a greater degree of competition.
The same was true with tea blending, where four firms possessed 85 per cent. of the market. They ought to have been competing against one another. Competition was not taking place. The intervention and report of the Price Commission led to a tumbling in price.

Mr. Dorrell: The hon. Gentleman has given a long list of places in the private sector in which he says that competition is not taking place. Are not those precisely the spheres of activity covered completely under clause 2 of the Bill, and which have never been covered by any legislation in the past?

Mr. Fraser: No, they are not, and will tell the hon. Gentleman why they are not covered. We have to explore the interpretation of clause 2, which speaks of a person engaging in an anti-competitive practice. We are talking here of the discovery of practices on the part of a number of firms. We have not been told, for example, that the worst offence is price parallelism. There may be no restrictive agreements between the firms concerned and no exchange of information, but they behave as if they were a monopoly. That is the practice of price parallelism.
It is extremely difficult in practice to nail price parallelism. The best way to nail it and to nail monopoly profit is to put on a price restriction. The practice that one is complaining about is that of making too much money by charging too much. Perhaps the right hon. Lady


will answer this question. Suppose that a monopolist makes a monopoly profit. If that is all he does, and if he does not engage in refusal to supply or in any other such practices—in other words, if he engages in no anti-competitive practice at all, apart from charging too much for his goods—is that an anti-competitive practice which can be investigated under clause 2?
Perhaps the right hon. Lady will also answer the question put to her by the hon. Friend the Member for Loughborough. If a group of companies does nothing except engage in price parallelism, without agreement, and makes too much profit, charging prices which are too high, is that an anti-competitive practice under clause 2? The answers to those questions would elucidate the debate considerably.
The Bill has three faces. First, it has the face of fraud. Secondly, it has the face of truth. Thirdly, it has the face of self-deception. The fraud is a fraud upon the electorate. There was nothing in the Conservative Party election manifesto about the abolition of the Price Commission, yet the decision was taken within days of the Tories coming to power. Coupled with the increase in rates of VAT, no one, having listened to the quotations given by my hon. Friends, can defend the charge that the public were defrauded by what was said about VAT by the present Chancellor of the Exchequer. There is a saying that dead men cannot lie, but dead sheep can.
Paradoxically, the Bill represents the truth as the Tory Party sees it. I do not believe that it is the truth. I believe that it is a heresy. But the Bill represents the Tory Party's blind belief in the forces of competition, which, as I have demonstrated, frequently cannot work. It represents the Tory Party's blind belief that the use of monetarism alone can bring about a reduction in the rate of inflation.
The Bill has the quality of self-deception, because the Government deceive themselves if they believe that competition can work in all circumstances. It does not. I shall mention two cases from my experience as a Minister to demonstrate the difficulties involved. One industrialist conveyed a message to me that, if I did not stop a

prosecution by the Director General of Fair Trading under the resale prices legislation, he would stop a great deal of investment in North Wales, where there was very high unemployment. That was a very large British company.
A very large electrical company in this country informed me that, if I did not automatically approve a merger that would give it a very large share of the market, it would immediately reconsider its plans for investment in a branch of electrical goods in this country.
I am not attacking the people concerned. I think that they had genuine problems about employment. There was a genuine difficulty. But if the Government imagine for one moment that they can constrain prices merely by competition, they are deceiving themselves and deceiving the country.

6.25 p.m.

The Minister for Consumer Affairs (Mrs. Sally Oppenheim): I rise to reply to the debate, facing serried ranks of Labour Members who are deeply concerned about the abolition of price control. [Hon. Members: "Where are they?"]
I should like to be associated with the tribute paid earlier by my right hon. Friend, and by the hon. Member for Norwood (Mr. Fraser), to the hon. Member for Glasgow, Govan (Mr. McMahon) on his maiden speech. It was robust and sincere—two qualities that will stand him in very good stead in this House.
I am also very happy to congratulate my hon. Friend the Member for Loughborough (Mr. Dorrell). His was a very good speech, although not a maiden speech.
I congratulate my hon. Friend the Member for Romford (Mr. Neubert) on his well-informed and realistic contribution earlier in the debate. He knows perhaps as much as any of us about this subject, and his contribution was very valuable.
I am afraid, however, that the only thing that was clear from the contribution of the hon. Member for West Stirling-shire (Mr. Canavan) was that he is certainly not one of the doomed men referred to in the Sunday papers in the latest episode of the Labour Party's internal vendetta. He does not come into that category. I sometimes think that when


Labour Members rise they should say which Labour Party they represent, because there are now two distinct Labour parties, one with its ideologies and policies deeply rooted in the 1930s and the other with its ideologies and policies deeply rooted in the 1920s.
The House has had an important debate on a measure which represents the first stage of the strengthened competition policy to which the Government are committed. Although the Bill is only a first stage, I must say to those hon. Members who have sought during the debate to denigrate the importance of the Bill that it is the most significant measure aimed at strengthening competition to be introduced in this House since the Fair Trading Act 1973.
In strengthening the Office of Fair Trading and the Monopolies and Mergers Commission, and giving them new powers which will complement their existing powers, we are bringing about a natural evolution in competition policy. We believe that the measure will give considerable stimulus to competition in this country.
Contrary to what the hon. Member for Norwood has said, consumer power—the only thing that matters in the end—depends on one thing alone, and that is competition. Where competition is limited or distorted, or where choice does not exist, the power of the consumer is undermined. When neither competition nor choice exists, the consumer is rendered powerless.
Example after example has shown that competition has a far more important part to play in reducing prices and raising standards than any short-term price controls can ever do. I put this question to those hon. Members who have sought to sneer at the benefits of competition as compared with price controls. When did any Price Commission reduce prices on the scale of the recent Marks and Spencer price reductions, without the help of any price control but with the benefit of market forces and competition?
The measure will make it possible for many of the uncompetitive practices, which artificially or unfairly prevent, restrict or distort competition, to be sought out and dealt with. It represents a progressive step. Some would even call it a radical step. We do not claim, however,

that competition alone can overcome inflation. We claim that it is a very important component in any counter-inflation strategy and that, together with our economy policies, it will prove far more effective in combating inflation in the long term than the short-term superficial measures and the political policies of the Labour Party, all of which failed so dismally.
Predictably enough, during the debate we have had the ritual wailing and lamentation from Opposition Members about the proposed abolition of the Price Commission. But do they really think that their Greek chorus has any credibility? Do they believe that a body that cost £7½ million and that restrained the retail price index by one-tenth of 1 per cent. has any relevance in any fight against inflation? At best, it can temporarily disguise the symptoms, as I demonstrated yesterday.
However, I ask Opposition Members to pause for a moment in their hour of bereavement. They may wish to reflect whether their attitudes are consistent or their arguments valid. They are bewailing the removal of an institution which, in its first year, according to its own reckoning, restrained about £120 million of profitability in British industry, affecting the retail price index by about one-tenth of 1 per cent. But in August 1978 the Labour Government introduced a measure which released not £120 million, but £6,000 million of profitability with a potential, in theory, of affecting the retail price index not by one-tenth of 1 per cent., but by over 4 per cent. I say "in theory" because it never happened. Competition prevented it. However, on that occasion not one Labour Member raised a murmur of dissent. Not one Labour Member voted against it. It was not even taken on the Floor of the House; it was taken upstairs in Standing Committee. I am not criticising the action of the previous Government; I am highlighting the inconsistency of Opposition Members in their attitude to the debate today. The same goes for the validity of their arguments.
I do not question the sincerity of the Opposition's concern about rising prices, but I challenge their proposition that the Price Commission has any role whatsoever to play in restricting rising prices. Let me consider the record and remind


the House of what I said in July. Out of 44 investigations which have taken place since the inception of the Price Commission, in only one case was a price increase, in effect, reduced as opposed to merely being deferred. During the Price Commission's first year—between August 1977 and 1978—in 18 out of 24 investigations the full increases were allowed either during or at the end of the investigations. From that we can only conclude that the vast majority of price increases were justified from the very beginning and that the investigations were an expensive waste of time and resources.
Therefore, in 1977–78, for £7½ million, involving the employment of 500 people and the use of an extensive building, the British taxpayer and consumer got in return a short-term marginal price advantage in things such as cement, plasterboard, some magazines and dry batteries, while more recently the Price Commission actually recommended that prices should be higher than the industries had asked for and, more recently still, we have a major manufacturing company announcing that it was able to reduce its prices as a direct result of the abolition of the Price Commission.
These were the achievements of the body to which Labour Members want to cling so desperately. These were the achievements of the body that the right hon. Member for Lanarkshire, North (Mr. Smith) described earlier as a vital part of the nation's defence against inflation. It is preposterous for Opposition Members to claim any such thing for the Price Commission and the role that it played.
The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), the former Secretary of State for Prices and Consumer Protection, who was responsible for the policy, not only said, as my right hon. Friend implied, that it had no significant effect on inflation but indicated in Committee that he did not envisage the long-term existence of the Price Commission in its original form. Indeed, the Labour Government's Green Paper recommended that the Price Commission should be merged with the Monopolies and Mergers Commission. We are strengthening the Commission not by merging the Price Commission with it but by giving it now powers more appropriate to

competition policy and more relevant to a long-term counter-inflation strategy.
The difference in approach is fundamental. We are moving away from a policy aimed at disguising inflation once it has taken place towards a policy aimed at tackling one of the causes of inflation and trying to prevent it from happening in the first place. That is the principle upon which we shall be voting for the Bill tonight and that is the principle upon which the Opposition will be voting against it.
Having dealt with a number of general points arising from the debate, in the limited time available to me I should like to deal with some of the particular points that have been made.
The right hon. Member for Lanarkshire, North dwelt lovingly on the value of the pre-notification procedures. I refer him to the words of the ex-chairman of the Price Commission in an article in The Observer on 5 August in which he said:
In reality, we intervened in less than 1 per cent. of the price increases notified to us.
Does the right hon. Gentleman think that was a big disincentive to people to notify price increases?
At another point the right hon. Gentleman referred, as did the right hon. Member for Down, South (Mr. Powell) yesterday at Question Time, to the inconsistency of our claim that the Price Commission was holding back investment at the same time as postulating, as we do, that it did not restrain inflation.
The right hon. Gentleman fails to understand that what held back investment was not price controls but the uncertainty that they created. No one knew why or where the axe would fall next. That was the reason why investment did not take place, and that situatlon was greatly exacerbated by the removal of safeguards earlier this year.
Some Opposition Members, including the hon. Member for Norwood, have expressed doubts about whether the measure will be more effective in terms of competition policy than the Price Commission. Although the right hon. Member for Sparkbrook frequently made claims for the competition role of the Price Commission, particularly when it became clear that it had no counter-inflation role, and although, as the hon.


Member for Norwood said, the Price Commission referred to various uncompetitive practices, the fact remains that the former Secretary of State referred only one of those practices to the Monopolies and Mergers Commission. He referred only one because it was difficult to refer those other instances to the Monopolies and Mergers Commission. When the Bill receives Royal Assent, those practices will be referable far more readily and easily. Therefore, this measure will enable the Director General of Fair Trading to act on those very cases to which the hon. Member for Norwood referred in a swifter and more realistic way than was possible before. If the hon. Gentleman contests that, perhaps he will say why so few references were made by his right hon. Friend as a result of recommendations by the Price Commission.

Mr. John Fraser: I was not going to say that. I was about to ask whether the right hon. Lady will now confirm that charging too high a price, particularly by a monopolist, could be an anti-competitive practice under clause 2.

Mrs. Oppenheim: I shall come to that matter. I should like to deal with the point made by the hon. Gentleman that, according to him—I may not be quoting him exactly—

Mr. Fraser: On this point.

Mrs. Oppenheim: On this point I was—the Price Commission dealt only in cases where there was a suspicion of anticompetitive practices or a monopoly situation. Is the hon. Gentleman seriously saying that, for example, Royal Doulton was occupying a monopoly in the market?
As regards the car spares report, the exclusive dealing to which the hon. Gentleman referred will be capable of much swifter and easier action after the Bill has Royal Assent, if the Director General considers that it is relevant to make such an investigation, than under the old system.
My hon. Friend the Member for Uxbridge (Mr. Shersby) wanted an interpretation of the public interest to be codified by Parliament in the Bill. This was not an approach which commended itself to us when we were considering the provisions of the Bill, but I shall certainly

take note of his points. The points that he made about the right of appeal are met, I think, by the fact that the Secretary of State has a veto at every stage, so that appeals can be made to him.
Since a substantial part of the Bill was based on a number of recommendations published in a Green Paper when the hon. Member for Norwood was a Minister, I should have thought that he would have been far less grudging than he was in conceding how useful a measure this is likely to be.
On the question that the hon. Member for Norwood raised regarding a high price charged by a monopolist and whether this would be referable, that might be as a result of an anti-competitive practice and the Director General of Fair Trading, on the basis of that high price existing in the case of a total monopolist, could undertake an investigation to see whether there were any anti-competitive practices leading to the high price, such as parallel pricing, to which the hon. Member for Norwood referred, and which, in fact, was already referable under the Fair Trading Act.—

Mr. John Fraser: rose——

Mrs. Oppenheim: I cannot give way to the hon. Gentleman. I have very limited time. I did not intervene during his speech.
The hon. Member for Norwood also dwelt mainly on the delusion—common in his party—that the controls that the Labour Government invented had some sort of beneficial effect. He dwelt very little, however, on the fact that those controls did not prevent prices from more than doubling when he was a Minister; and it is not a recipe to be recommended or copied by us.
A number of Opposition Members expressed scepticism about the Bill and whether the measures in it were likely to be important. The two new processes in the Bill which I emphasise relate to the uncompetitive practices, which can obviously be dealt with more swiftly, and the referral of public sector monopolies. This is where the hon. Member for Aberdare (Mr. Evans) got it all wrong, because the whole basis of the reference of abuse of competition would be in relation specifically to the question of costs, efficiency and service to consumers. Indeed,


the Monopolies and Mergers Commission will be able to report, and the order-making powers under the Fair Trading Act will be available in this context.
We attach very great importance to this provision in the Bill because here we are dealing with a situation where choice is limited. It is not tolerable for consumers of goods and services of the nationalised industries to subsidise through high prices, inefficiency, waste or over-manning, if these exist because the disciplines of competition are missing. We believe that this adds a valuable measure of consumer protection and we are surprised that the right hon. Member for Lanarkshire, North complained of a measure which merely redresses the balance in favour of the consumer. I make no apologies for that, because the consumer is at a disadvantage under the present system.

As I said at the beginning, the Bill is only a first step and not the last word on competition policy. The proposals in the Bill represent a genuine and fundamental initiative which we believe will stimulate competition considerably. It is not a cosmetic policy. The benefits will not be found overnight, but we believe that competition is a potent weapon, both in the fight against inflation and in the establishment of consumer sovereignty. We saw that the short-term manipulation of prices which characterised the policies of the last Government did not work. We have inherited the backlog of that failure. We believe that our approach offers a more realistic chance of longterm and sustained success. I have no hesitation in commending the Bill to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 302, Noes 235.

Division No. 83]
AYES
[6.45 p.m.


Adley, Robert
Butcher, John
Fookes, Miss Janet


Aitken, Jonathan
Butler, Hon Adam
Forman, Nigel


Alexander, Richard
Cadbury, Jocelyn
Fowler, Rt Hon Norman


Amery, Rt Hon Julian
Carlisle, John (Luton West)
Fox, Marcus


Ancram, Michael
Carlisle, Kenneth (Lincoln)
Fraser, Rt Hon H. (Stafford &amp; St)


Arnold, Tom
Carlisle, Rt Hon Mark (Runcorn)
Fraser, Peter (South Angus)


Aspinwall, Jack
Chalker, Mrs Lynda
Freud, Clement


Atkins, Robert (Preston North)
Channon, Paul
Fry, Peter


Atkinson, David (B'mouth, East)
Chapman, Sydney
Galbraith, Hon T. G. D.


Baker, Kenneth (St. Marylebone)
Churchill, W. S.
Gardiner, George (Reigate)


Baker, Nicholas (North Dorset)
Clark, Hon Alan (Plymouth, Sutton)
Gardner, Edward (South Fylde)


Beaumont-Dark, Anthony
Clark, Dr William (Croydon South)
Garel-Jones, Tristan


Belth, A. J
Clarke, Kenneth (Rushcliffe)
Gilmour, Rt Hon Sir Ian


Bell, Ronald
Clegg, Walter
Goodhart, Philip


Bendall, Vivian
Cockeram, Eric
Gorst, John


Bennett, Sir Frederic (Torbay)
Colvin, Michael
Gow, Ian


Benyon, Thomas (Abingdon)
Cope, John
Gower, Sir Raymond


Benyon, W. (Buckingham)
Cormack, Patrick
Grant, Anthony (Harrow C)


Best, Keith
Corrie, John
Gray, Hamish


Bevan, David Gilroy
Costain, A. P.
Griffiths, Eldon (Bury St Edmunds)


Biffen, Rt Hon John
Cranborne, Viscount
Griffiths, Peter (Portsmouth N)


Biggs-Davison, John
Crouch, David
Grimond, Rt Hon J.


Blackburn, John
Dean, Paul (North Somerset)
Grist, Ian


Blaker, Peter
Dickens, Geoffrey
Grylls, Michael


Body, Richard
Dorrell, Stephen
Gummer, John Selwyn


Bonsor, Sir Nicholas
Douglas-Hamilton, Lord James
Hamilton, Hon Archie (Eps'm&amp;Ew'll)


Boscawen, Hon Robert
Dover, Denshore
Hamilton, Michael (Salisbury)


Bottomley, Peter (Woolwich West)
du Cann, Rt Hon Edward
Hampson, Dr Keith


Bowden, Andrew
Dunlop, John
Haselhurst, Alan


Boyson, Dr Rhodes
Dunn, Robert (Dartford)
Havers, Rt Hon Sir Michael


Bradford, Rev. R.
Durant, Tony
Hawksley, Warren


Braine, Sir Bernard
Dykes, Hugh
Heath, Rt Hon Edward


Bright, Graham
Eden, Rt Hon Sir John
Heddle, John


Brinton, Tim
Eggar, Timothy
Henderson, Barry


Brittan, Leon
Elliott, Sir William
Heseltine, Rt Hon Michael


Brocklebank-Fowler, Christopher
Emery, Peter
Higgins, Rt Hon Terence L.


Brooke, Hon Peter
Fairbairn, Nicholas
Hill, James


Brotherton, Michael
Fairgrieve, Russell
Hogg, Hon Douglas (Grantham)


Brown, Michael (Brigg &amp; Sc'thorpe)
Faith, Mrs Sheila
Holland, Philip (Carlton)


Browne, John (Winchester)
Farr, John
Hooson, Tom


Bruce-Gardyne, John
Fell, Anthony
Hordern, Peter


Buchanan-Smith, Hon Alick
Fenner, Mrs Peggy
Howe, Rt Hon Sir Geoffrey


Buck, Antony
Finsberg, Geoffrey
Howell, Rt Hon David (Guildford)


Budgen, Nick
Fisher, Sir Nigel
Howell, Ralph (North Norfolk)


Bulmer, Esmond
Fletcher, Alexander (Edinburgh N)
Howells, Geraint


Burden, F. A.
Fletcher-Cooke, Charles
Hunt, David (Wirral)




Hunt, John (Ravensbourne)
Montgomery, Fergus
Sims, Roger


Jenkin, Rt Hon Patrick
Moore, John
Skeet, T. H. H.


Jessel, Toby
Morris, Michael (Northampton, Sth)
Speed, Keith


Johnson Smith, Geoffrey
Morrison, Hon Charles (Devizes)
Speller, Tony


Johnston, Russell (Inverness)
Morrison, Hon Peter (City of Chester)
Spence, John


Jopling, Rt Hon Michael
Mudd, David
Spicer, Michael (S Worcestershire)


Joseph, Rt Hon Sir Keith
Murphy, Christopher
Sproat, Iain


Kaberry, Sir Donald
Myles, David
Squire, Robin


Kershaw, Anthony
Neale, Gerrard
Stanbrook, Ivor


Kimball, Marcus
Needham, Richard
Stanley, John


King, Rt Hon Tom
Nelson, Anthony
Steen, Anthony


Kitson, Sir Timothy
Neubert, Michael
Stevens, Martin


Knight, Mrs Jill
Newton, Tony
Stewart, Ian (Hitchin)


Knox, David
Nott, Rt Hon John
Stewart, John (East Renfrewshire)


Lang, Ian
Onslow, Cranley
Stokes, John


Langford-Holt, Sir John
Oppenheim, Rt Hon Mrs Sally
Stradling Thomas, J.


Latham, Michael
Osborn, John
Tapsell, Peter


Lawrence, Ivan
Page, Rt Hon R. Graham (Crosby)
Taylor, Robert (Croydon NW)


Lawson, Nigel
Parris, Matthew
Temple-Morris, Peter


Lee, John
Patten, John (Oxford)
Thomas, Rt Hon Peter (Hendon S)


Lennox-Boyd, Hon Mark
Pattie, Geoffrey
Thompson, Donald


Lester, Jim (Beeston)
Pawsey, James
Thorne, Neil (llford South)


Lewis, Kenneth (Rutland)
Penhaligon, David
Thornton, Malcolm


Lloyd, Ian (Havant &amp; Waterloo)
Percival, Sir Ian
Townend, John (Bridlington)


Lloyd, Peter (Fareham)
Peyton, Rt Hon John
Townsend, Cyril D. (Bexleyheath)


Loveridge, John
Pink, R. Bonner
Trippier, David


Lyell, Nicholas
Pollock, Alexander
Trotter, Neville


McAdden, Sir Stephen
Powell, Rt Hon J. Enoch (S Down)
van Straubenzee, W. R.


Macfarlane, Neil
Prentice, Rt Hon Reg
Vaughan, Dr Gerard


MacGregor, John
Price, David (Eastleigh)
Viggers, Peter


Mackay, John (Argyll)
Prior, Rt Hon James
Wakeham, John


Macmillan, Rt Hon M. (Farnham)
Proctor, K. Harvey
Waldegrave, Hon William


McNair-Wilson, Michael (Newbury)
Pym, Rt Hon Francis
Walker, Rt Hon Peter (Worcester)


McNair-Wilson, Patrick (New Forest)
Rathbone, Tim
Walker, Bill (Perth &amp; E Perthshire)


McQuarrie, Albert
Rees, Peter (Dover and Deal)
Walker-Smith, Rt Hon Sir Derek


Madel, David
Rees-Davies, W. R.
Waller, Gary


Major, John
Renton, Tim
Walters, Dennis


Marland, Paul
Rhodes James, Robert
Ward, John


Marlow, Tony
Ridley, Hon Nicholas
Warren, Kenneth


Marshall, Michael (Arundel)
Rifkind, Malcolm
Watson, John


Mates, Michael
Rippon, Rt Hon Geoffrey
Wells, John (Maidstone)


Mather, Carol
Roberts, Wyn (Conway)
Wells, Bowen (Hert'rd &amp; Stev'nage)


Maude, Rt Hon Angus
Ross, Wm. (Londonderry)
Wheeler, John


Mawby, Ray
Rossi, Hugh
Whitelaw, Rt Hon William


Mawhinney, Dr Brian
Rost, Peter
Whitney, Raymond


Maxwell-Hyslop, Robin
Royle, Sir Anthony
Wickenden, Keith


Mayhew, Patrick
Sainsbury, Hon Timothy
Wiggin, Jerry


Mellor, David

Williams, Delwyn (Montgomery)


Meyer, Sir Anthony
St. John-Stevas, Rt Hon Norman
Winterton, Nicholas


Miller, Hal (Bromsgrove &amp; Redditch)
Shaw, Giles (Pudsey)
Wolfson, Mark


Mills, Iain (Meriden)
Shaw, Michael (Scarborough)
Young, Sir George (Acton)


Mills, Peter (West Devon)
Shelton, William (Streatham)
Younger, Rt Hon George


Miscampbell, Norman
Shepherd, Colin (Hereford)



Moate, Roger
Shepherd, Richard(Aldridge-Br' hills)
TELLERS FOR THE AYES:


Molyneaux, James
Shersby, Michael
Mr. Spencer Le Marchant and


Monro, Hector
Silvester, Fred
Mr. Anthony Berry.




NOES


Abse, Leo
Campbell, Ian
Davis, Terry (B'rm'ham, Slechford)


Adams, Allen
Campbell-Savours, Dale
Dempsey, James


Allaun, Frank
Canavan, Dennis
Dewar, Donald


Anderson, Donald
Cant, R. B.
Dixon, Donald


Archer, Rt Hon Peter
Carmichael, Neil
Dobson, Frank


Armstrong, Rt Hon Ernest
Carter-Jones, Lewis
Dormand, Jack


Ashley, Rt Hon Jack
Clark, Dr David (South Shields)
Douglas, Dick


Ashton, Joe
Cocks, Rt Hon Michael (Bristol S)
Douglas-Mann, Bruce


Atkinson, Norman (H'gey, Tott'ham)
Cohen, Stanley
Dubs, Alfred


Barnett, Guy (Greenwich)
Coleman, Donald
Dunn, James A. (Liverpool, Kirkdale)


Barnett, Rt Hon Joel (Heywood)
Concannon, Rt Hon J. D.
Dunnett, Jack


Benn, Rt Hon Anthony Wedgwood
Conlan, Bernard
Dunwoody, Mrs Gwyneth


Bennett, Andrew (Stockport N)
Cook, Robin F.
Eadie, Alex


Bidwell, Sydney
Cowans, Harry
Eastham, Ken


Booth, Rt Hon Albert
Cox, Tom (Wandsworth, Tooting)
Ellis, Raymond (NE Derbyshire)


Boothroyd, Miss Betty
Craigen, J. M. (Glasgow, Maryhill)
Ellis, Tom (Wrexham)


Bottomley, Rt Hon Arthur (M'brough)
Crowther, J. S.
English, Michael


Bradley, Tom
Cryer, Bob
Evans, Ioan (Aberdare)


Bray, Dr Jeremy
Cunliffe, Lawrence
Ewing, Harry


Brown, Hugh D. (Provan)
Cunningham, George (Islington S)
Faulds, Andrew


Brown, Robert C. (Newcastle W)
Cunningham, Dr John (Whitehaven)
Field, Frank


Brown, Ronald W. (Hackney S)
Dalyell, Tam
Fitch, Alan


Brown, Ron (Edinburgh, Leith)
Davies, Rt Hon Denzil (Llanelli)
Fitt, Gerard


Buchan, Norman
Davies, E. Hudson (Caerphilly)
Flannery, Martin


Callaghan, Rt Hon J. (Cardiff SE)
Davies, Ifor (Gower)
Fletcher, L. R. (Ilkeston)


Callaghan, Jim (Middleton &amp; P)
Davis, Clinton (Hackney Central)
Fletcher, Ted (Darlington)







Foot, Rt Hon Michael
Mabon, Rt Hon Dr J Dickson
Roper, John


Ford, Ben
McCartney, Hugh
Ross, Ernest (Dundee West)


Forrester, John
McDonald, Dr Oonagh
Ryman, John


Foster, Derek
McElhone, Frank
Sheerman, Barry


Foulkes, George
McKay, Allen (Penistone)
Sheldon, Rt Hon Robert (A'ton-u-L)


Fraser, John (Lambeth, Norwood)
McKelvey, William
Shore, Rt Hon Peter (Step and Pop)


Freeson, Rt Hon Reginald
McMillan, Tom (Glasgow, Central)
Silkin, Rt Hon John (Deptford)


Garrett, John (Norwich S)
McNally, Thomas
Silkin, Rt Hon S. C. (Dulwich)


Garrett, W. E. (Wallsend)
McWilliam, John
Silverman, Julius


George, Bruce
Magee, Bryan
Skinner, Dennis


Ginsburg, David
Marshall, David (Gl'sgow, Shettles'n)
Smith, Rt Hon J. (North Lanarkshire)


Golding, John
Marshall, Dr Edmund (Goole)
Soley, Clive


Gourlay, Harry
Marshall, Jim (Leicester South)
Spearing, Nigel


Graham, Ted
Martin, Michael (Gl'gow, Springb'rn)
Spriggs, Leslie


Grant, George (Morpeth)
Mason, Rt Hon Roy
Stallard, A. W.


Grant, John (Islington C)
Maxton, John
Stewart, Rt Hon Donald (W Isles)


Hamilton, W. W. (Central Fife)
Maynard, Miss Joan
Stoddart, David


Harrison, Rt Hon Walter
Meacher, Michael
Stott, Roger


Hattersley, Rt Hon Roy
Mellish, Rt Hon Robert
Strang, Gavin


Haynes, Frank
Mikardo, Ian
Straw, Jack


Healey, Rt Hon Denis
Millan, Rt Hon Bruce
Summerskill, Hon Dr Shirley


Hogg, Norman (E Dunbartonshire)
Miller, Dr M. S. (East Kilbride)
Taylor, Mrs Ann (Bolton West)


Home Robertson, John
Mitchell, R. C. (Soton, Itchen)
Thomas, Dafydd (Merioneth)


Homewood, William
Morris, Rt Hon Alfred (Wythenshawe)
Thomas, Jeffrey (Abertillery)


Hooley, Frank
Morris, Rt Hon Charles (Openshaw)
Thomas Mike (Newcastle East)


Horam, John
Morris, Rt Hon John (Aberavon)
Thomas, Dr Roger (Carmarthen)


Howell, Rt Hon Denis (B'ham, Sm H)
Morton, George
Thorne, Stan (Preston South)


Huckfield, Les
Moyle, Rt Hon Roland



Hughes, Mark (Durham)
Newens, Stanley
Tilley, John


Hughes, Robert (Aberdeen North)
Oakes, Rt Hon Gordon
Tinn, James


Hughes, Roy (Newport)
O'Halloran, Michael
Torney, Tom


Janner, Hon Greville
O'Neill, Martin
Urwin, Rt Hon Tom


Jay, Rt Hon Douglas
Orme, Rt Hon Stanley
Varley, Rt Hon Eric G.


John, Brynmor
Owen, Rt Hon Dr David
Wainwright, Edwin (Dearne Valley)


Johnson, James (Hull West)
Palmer, Arthur
Walker, Rt Hon Harold (Doncaster)


Johnson, Walter (Derby South)
Park, George
Watkins, David


Jones, Rt Hon Alec (Rhondda)
Parker, John
Weetch, Ken


Jones, Barry (East Flint)
Parry, Robert
Welsh, Michael


Jones, Dan (Burnley)
Pavitt, Laurie
White, Frank R. (Bury &amp; Radcliffe)


Kaufman, Rt Hon Gerald
Pendry, Tom
White, James (Glasgow, Pollok)


Kerr, Russell
Powell, Raymond (Ogmore)
Whitehead, Phillip


Kilroy-Silk, Robert
Prescott, John
Willey, Rt Hon Frederick


Kinnock, Neil
Price, Christopher (Lewisham West)
Williams, Rt Hon Alan (Swansea W)


Lambie, David
Race, Reg
Williams, Sir Thomas (Warrington)


Lamborn, Harry
Radice, Giles
Wilson, Gordon (Dundee East)


Lamond, James
Rees, Rt Hon Merlyn (Leeds South)
Wilson, Rt Hon Sir Harold (Huyton)


Leadbitter, Ted
Richardson, Miss Jo
Wilson, William (Coventry SE)


Leighton, Ronald
Roberts, Albert (Normanton)
Winnick, David


Lestor, Miss Joan (Eton &amp; Slough)
Roberts, Allan (Bootle)
Woodall, Alec


Lewis, Ron (Carlisle)
Roberts, Ernest (Hackney North)
Wright, Sheila


Litherland, Robert
Roberts, Gwilym (Cannock)



Lofthouse, Geoffrey
Robertson. George
TELLERS FOR THE NOES


Lyon, Alexander (York)
Robinson, Geoffrey (Coventry NW)
Mr. Joseph Dean and


Lyons, Edward (Bradford West)
Rooker, J. W.
Mr. James Hamilton.


Question agreed to.

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

COMPETITION BILL [MONEY]

Queen's Recommendation having been signified—

Resolved,

That, for the purposes of any Act of the present Session to abolish the Price Commission,

to make provision for the control of anti-competitive practices in the supply and acquisition of goods and the supply and securing of services, to provide for references of certain public bodies and other bodies corporate to the Monopolies and Mergers Commission and to provide for the investigation of prices and charges by the Director General of Fair Trading, it is expedient to authorise the payment out of moneys provided by Parliament of—

(a) any expenses incurred by the Secretary of State or the Director General of Fair Trading in consequence of the provisions of that Act; and
(b) any increase attributable to that Act in the sums payable out of moneys so provided under any other Act.—[Mrs. Sally Oppenheim.]

Orders of the Day — LONDON TRANSPORT BILL (By Order)

Order for Second Reading read.

Mr. Deputy Speaker (Mr. Richard Crawshaw): Before I call the hon. Member for Streatham (Mr. Shelton), I wish to announce to the House that the instruction standing in the name of the hon. Member for Lewisham, West (Mr. Price) has not been selected.

7.1 p.m.

Mr. William Shelton: I beg to move, That the Bill be now read a Second time.
The Bill contains 27 clauses and authorises the extension of the Jubilee line from Fenchurch Street to Woolwich Arsenal and Beckton. It is possible that in a future Bill a branch to Thamesmead will be proposed.
A map is available in the Library. I discovered, after 10 years' membership of the House, that only Ministers are allowed to deposit literature in the Library. Hon. Members who do not have the privilege of being on the Front Bench may leave material in the Library but not deposit it. The material is not deposited there but is there for the edification of any hon. Member who wishes to consult it.
When London Transport asked me to propose the Bill, I hesitated for several reasons. First, although I am a Member for an inner London constituency, Streatham has little to do with dockland. However, I understand that the hon. Member for Woolwich, East (Mr. Cartwright) was prepared to present the Bill but unfortunately he is abroad on parliamentary business. Secondly, I was concerned about the financial implications involved in a massive undertaking such as the construction of an underground railway of the length of the proposed Jubilee line. I assure hon. Members, however, that the reality of the Bill is less frightening than might appear. It proposes no commitment for funding by anyone—the Government, the GLC, London Transport or the boroughs.
The purpose of the Bill is to safeguard the route. I hope that the usual concomitant of safeguarding, which is blight, is not involved. I trust my words will

reassure hon. Members about the purposes of the Bill, as I have been reassured from studying the papers and proposals. London Members never miss an opportunity to say a few words about our city, and sometimes those words reach a wider audience. That can only be beneficial to our country, about which far too little is said in the House.
Greater London comprises about one-eighth of the national economy. It has a population of about 7 million, which is nearly as great as Scotland and Wales together. The economy depends on cities such as London and their associated wealth creation capabilities. The success of the economy generally depends in some measure on the success of London's economy.
As my London colleagues know, the picture is not too bright. One in nine of the unemployed in Great Britain, is a Londoner. In October 1978, 150,000 male adults were unemployed in London, and between 1965 and 1975 London lost nearly 500,000 jobs. In those 10 years, all the assisted areas together lost only about 300,000 jobs. That was due partly to a disproportionate share of declining industries in London and partly to successive Government policies such as the creation of the Location of Offices Bureau, of which I think enough has been said.
Inner London has a population of 2½million, which is almost equivalent to the population of the Republic of Ireland and of the United Kingdom regions. Unemployment in inner London has been consistently higher than the national average, especially in East London. Within the catchment area of the Jubilee line, Poplar has a male unemployment rate of 13 per cent., Deptford over 12 per cent., Stepney over 12 per cent, and Canning Town over 8 per cent. It is in that context that I commend the Bill to the House.
The main purpose of the Bill is spelt out in clause 4 and succeeding clauses that provide the necessary powers to accomplish clause 4. It is to extend the Jubilee line from Fenchurch Street to Woolwich Arsenal. A later Bill will extend the line from Woolwich Arsenal to Thamesmead and provide a link from Custom House to Beckton. The proposal to enlarge this line springs from the


strategic plan, published by the Docklands joint committee in 1976 and accepted in general terms by the then Secretary of State, the right hon. Member for Stepney and Poplar (Mr. Shore). I am pleased to see him in the Chamber tonight because he has great knowledge of these matters. This underground line drives through the heart of dockland, through many areas of unemployment. When it is developed the whole area will give a major impetus to the growth of London's economy as well as to that of the South-East and the country generally.
I understand that in dockland there are some 5,500 acres waiting to be developed, most of which are in the catchment area of the Jubilee underground line. It crosses the Thames—and this is an extraordinary thing—no fewer than five times and one needs to look at a map to understand how this is so. In fact, the underground runs fairly straight but the Thames takes a rather circuitous route.
There has been a psychological barrier to the development of East London because of the Thames, which has always been regarded as a strong natural barrier to increased prosperity and growth. As I have said, this line will cross the Thames five times, so it must have a salutary effect on that "barrier" attitude. It will make dockland more attractive to employers and to local residents by giving them an easier, faster and more direct access to central London where many jobs are located. It will enable them to commute with much more facility.
When Dockland is developed there will be 20,000 to 30,000 potential new jobs which should contribute an accretion of £100 million annually to the economy. If only 5,000 more residents of East London travel to work on the Jubilee line to the centre of the city, it will add £20 million to £30 million annually to the local economy in the immediate catchment area of the line.
One may ask what alternatives have been studied. A great number have been and are being studied, and if it should appear in the future that there is some alternative that is more favourable than the Jubilee line that option will be taken and the Jubilee line will not go ahead. I cannot emphasise too strongly that this

Bill only authorises the safeguarding of this line. It in no way contains a commitment to build or make a call on any national or local funds.
The first alternative is a mainly surface, light railway which would do some of the things that need to be done. The problem is that it would fail to link the areas north and south of the river except at vast expense and with extreme difficulty. The proposal to build five railway bridges to accommodate such a light railway would be very difficult to implement.
The second alternative is a busway. Replacing the Jubilee line by buses would inevitably mean lack of speed and reliability, and buses could not provide the links across the river that the underground could give.
The third suggestion is for the docklands southern relief road, which probably will be built anyway, but this is complementary to the Jubilee line. It is proposed that it should tunnel under the river, but only twice. Any road would have a problem of access into Central London, both at the western end and at the eastern end in the Custom House, Beckton and Thamesmead areas.
The fact is that 500,000 Londoners do not own a car, and the present petrol situation does not militate strongly for further reliance on the private car as a means of transport. This is an element which hon. Members should keep in mind when reflecting on the value of an underground railway compared with that of a bus or private car. The southern relief road would also carry freight which the underground would not. Therefore, the two are complementary.
I turn to the proposed route of the Jubilee line. London Transport already has powers to extend the line from Charing Cross to Fenchurch Street. These powers have been given, but there is a pause for recosting. In this Bill we are talking about the extension from Fenchurch Street. The first area through which it would pass would be Wapping. The station would take in the old London dock area which includes St. Katharine's dock. I visited this area recently—the World Trade Centre—and was impressed by the development there. It also includes the London dock area development, planned mutually by the GLC and the Tower Hamlets borough council.
From Wapping the route goes beneath the river to Surrey docks north. In this case, as in every case, consultation has been carried out with the local borough. The borough of Southwark has agreed to the location of the proposed station for Surrey docks north, which would materially assist the area. The GLC is looking to a development brief to replace the famous trade mart about which many of us know. I have just heard that Taylor Woodrow is showing considerable interest in the site which would be served by Surrey docks north.
From there the Jubilee line goes across the river again to Millwall. Tower Hamlets council has been consulted about the location of that station and has agreed that it would materially assist the development of the Isle of Dogs which is notoriously short of public transport. Then again the line goes beneath the river to emerge at a station in North Greenwich. The Greenwich borough council has been consulted and has agreed. This is a major industrial area and the only station there at present is a Southern Region station which is nearly a mile away and which serves the industrial area rather than the development to be served by the proposed station of North Greenwich.
The route then goes beneath the river once more to Custom House where it emerges for a while from the tunnel. The Newham borough council has been consulted and has agreed that the line would serve existing extensive housing, the new housing that is planned, and a proposed district centre in the development plan, should that proceed. That would provide a rail link with the British Rail North Woolwich line.
The fifth time that the line goes under the river is to Woolwich, presumably with an intermediate station at Silvertown. It is proposed that there should be a branch from Custom House to Beckton, which will serve the Beckton development that is proposed by Newham council, and that there will be a depot in Beckton. The powers in the Bill to safeguard the route that I am talking about stop at that point. It is hoped that in a year or two, provided plans continue on their current course, the House will be asked for approval to safeguard a route from Woolwich Arsenal to Thamesmead. I claim considerable knowledge of the area of Thamesmead, as I served on the Thamesmead committee

in the GLC in the earlier and perhaps more glorious days of that development about 10 or 15 years ago. That development would be greatly aided by access to an underground railway line.
All hon. Members have the right to ask how much this route will cost if it is undertaken. The route from Charing Cross to Fenchurch Street, which is already empowered, will cost just over £100 million at 1979 prices. If the plan goes ahead it will not be a case of writing a cheque for £105 million but the money would be called on over a period. The area of the line that we are discussing tonight would cost about £220 million if it went ahead. Therefore, the total development would cost £325 million at 1979 prices.
I cannot labour enough the point that I wish to assuage the fear of hon. Members about the call for money in the Bill. There is no commitment to build in the Bill. Even if the Bill is passed there is no commitment to build. If the line is built it will not be in isolation but will keep pace with the developments and needs of dockland if and when the money is forthcoming. If the money is not forthcoming the line will never be built. Having looked at the papers, I would regard that as a great hardship for the eastern part of our great city.
The purpose of the Bill is to safeguard the route. We all know from experience that the obverse side of the coin of safeguarding is blight. I found that out in my constituency with the M23 plans. I pay tribute to Labour Members for the fact that the blight of the M23 was moved from Streatham, for which I am heartily grateful. If the route is not safeguarded by the Bill, and if in the future such a Bill is passed and the decision is taken at that time to safeguard the route and build it, it is extremely likely that the building costs will be much greater than they would be if the Bill were passed tonight.
If the safeguarding provision is passed tonight, there will be little or no blight. Much of the proposed area is derelict, as hon. Members know. Therefore, there would be a negligible effect on the surface of the monster passing underneath. The areas where the stations emerge have been safeguarded by the boroughs. Therefore, surface blight from the location of


stations already exists. Indeed, in a semi-derelict area the location of a station can be regarded not as blight but as an advantage to attract development around it. The fact that the location of the stations is more or less known, accepted and approved by the boroughs must work towards fructifying development in those areas.

Mr. Ronald W. Brown: The hon. Gentleman has repeated the point that the Bill does not call upon any money. Will he tell me how, if London Transport is served with a notice to purchase, and the Bill gives that power, it will be able to purchase the land in accordance with its obligations under clause 21(2)?

Mr. Shelton: I am delighted that the hon. Gentleman—who is a good friend of mine—has asked that question. I should like the permission of the House to reply to it at the end of the debate. At the moment I have no idea of the answer. However, I am glad that the hon. Gentleman has grasped the point. I suspect that he has a good point and that London Transport may be obliged to purchase land. However, in terms of the hundreds of millions of pounds that would be spent on digging the tunnel that amount will be small. I shall return to discuss one or two clauses in the Bill which require some expenditure but which have nothing to do with the Jubilee line.
Where the blight comes above the ground at Custom House, as hon. Members will see by consulting the map, it will run along existing British Rail routes and land that is owned by the Port of London Authority. That could hardly be counted as blight. If that is the case, what is the purpose of the Bill? What are we safeguarding if the line goes underground and the stations are already safeguarded? Why are we bothering with the Bill and why will the costs be much greater in the future if the Bill is not passed tonight?
The point is simple. If there is no safeguarding provision on the route, there is nothing to stop private or municipal developers building high-rise flats, offices or commercial developments with foundations below the ground. That development would make it impossible for the underground railway to pass beneath.

That is the major purpose of the provision. The route has been sought out and surveyed countless times and if major development with underground piles takes place that building will have to be knocked down or the route will have to be changed.

Mr. Ron Leighton: While the hon. Gentleman is talking about if and when the money becomes available, perhaps he can help me in relation to a letter from the GLC that refers to a "pause" on the Jubilee line having been agreed with the Government. Can the hon. Gentleman tell us how long the pause is likely to last and exactly what that expression means?

Mr. Shelton: I understand that the pause is in relation to the route from Charing Cross to Fenchurch Street which is empowered by a previous Bill. The pause does not affect the route that we are discussing. If the part between Charing Cross and Fenchurch Street were not built, it would be a nonsense to build the section referred to in the Bill.
The net immediate effects of the Bill will be to safeguard against future vast foundations being driven beneath the area that we are talking about and to demonstrate confidence in dockland. It will be a demonstration that the House believes that we shall have faster growth in dockland and more development and more jobs sooner so that those living there will be able more easily to find employment, which we know is a problem, by commuting into Central London.
I should like to refer briefly to other powers contained in the Bill. In clause 4, London Transport is seeking the power to build new ticket halls at Shadwell and Rotherhithe stations. It needs that power because it has to acquire land. I am not privileged enough to know those stations, but I am sure that any hon. Member who does will agree that new ticket halls are required.
Clause 20 seeks an extension of time in respect of land authorised to be acquired for the work at Gloucester Road station. I drive past the station frequently and have seen the hoardings there for several years. I have often wondered what is going on behind them and I understand that an extension is being built. There is an extraordinary provision called the Runcorn clause which can be


invoked so that if London Transport has not used the power sought in clause 20 within six years it will fail. If anyone wishes to force London Transport to buy land it will have to do so. There is, therefore, some safeguard for the unfortunate people living in the Gloucester Road area.
Clause 22 permits London Transport International Services Limited not only to advise and give assistance on schemes, which it does already, but to manage schemes. When I raised my eyes at that apparent extension of the powers of nationalised industry to interfere in our domestic affairs, I was assured that the management of such schemes takes place widely overseas—in Caracas, for example—and I felt that I could relax on that point and recommend it to my hon. Friends with some spirit.
Clause 23 permits the placing of conspicuous distance marks along railway lines if they are requested by the Secretary of State. I hope that no hon. Member will ask me what a conspicuous distance mark is.
Clause 24 increases from £25 to £50 the maximum fine for obstructing the construction of railways or refusing to leave a carriage on arriving at one's destination. I cannot believe that anyone will take grave exception to that provision.
I hope that hon. Members will agree that by passing the Bill we shall be showing confidence in the future of dockland which will be noted outside the House. We know the difficulties that London and dockland face. In terms of jobs and the contribution to the national economy, I warmly recommend the Bill.

7.35 p.m.

Mr. Christopher Price: There has been a blocking motion on the Bill in the names of myself and my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) for some time. I have some sympathy with London Transport as regards the time that it has taken for the Bill to reach the Floor of the House. However, events are moving so fast in terms of Government decisions, or lack of them, about South-East London and dockland that this is not the sort of Bill which we can allow simply to slip past. Its implications are wide and deserve

minute examination on the Floor of the House.
I understand that there has been some difficulty in getting a sponsor for the Bill. I sympathise with the hon. Member for Streatham (Mr. Shelton) because he did not seem to have had as much time to prepare himself for the moving of the Bill as some other hon. Members may have required. I am interested in the new Tory doctrine that it is all right for nationalised industries to operate in Caracas but not in London. We may need to return to that matter from time to time.
The Bill is brought in by London Transport. All London Members know that there is intense interest in the operations of London Transport among pretty well all the citizens of London. London Transport does its best, with a bountiful hospitality from time to time, to explain its problems to hon. Members, but the uncertainty and disillusionment about its operations remain and are probably greater than for many years.
The Bill proposes the safeguarding of a route and not the immediate expenditure of any money, but it is necessary to examine it in detail because, despite all the statements of sponsoring Members to the effect that no immediate expenditure is contemplated, we usually find that when such Private Bills go through the House the money is eventually spent.
Any commitment to the sort of capital expenditure envisaged in the Bill has enormous implications in regard to the lack of capital expenditure in other parts of the metropolis. It cannot be seen in isolation. If the capital expenditure necessary to build the underground line and the road that Sir Horace Cutler apparently wants to build alongside it is made available by the Government, there will be no money for the development of a transport system, public or otherwise, for any other part of the metropolis. That is why I, as a Member for Lewisham, have a particular interest in the Bill.
The schedule detailing the local authorities consulted by London Transport about the Bill makes no mention of the London borough of Lewisham. Tower Hamlets, Southwark, Greenwich and Newham are mentioned, but not Lewisham. The reason is that at one


time this underground line should have come to Lewisham, but for better or worse a decision was taken to shift it. In that sense I declare a very real constituency interest in this Bill.
If hon. Members cast their minds back, they will remember that the Jubilee line was not born as the Jubilee line. It was born as the Fleet line, a much more democratic word that I personally wish the GLC had stuck to. That line was not to go through dockland to Thamesmead, Beckton, or wherever. The original plan was to take it from Fenchurch Street to New Cross, where there would be a British Rail interchange, and then to Lewisham. When it got to Lewisham, plans were mooted to switch it on to a British Rail line and to take it out to Hayes in Kent.

Mr. Nigel Spearing: My hon. Friend knows that my constituency is on the alignment in the Bill. Does he not agree that the powers in the original Bill extend to Lewisham, if not further into Kent, and that should this line be built there is nothing in practice to prevent a common bifurcation from taking place so that both areas are served by this line?

Mr. Price: I take my hon. Friend's point. But throughout the whole saga of the Fleet-Jubilee line London Transport has emphasised that in principle there is nothing to prevent a bifurcation at Fenchurch Street. My hon. Friend and I are both members of SERA, the organisation that accepts that there may be rather less growth in the future than there has been in the past. Although in practice there is nothing to prevent a bifurcation, in terms of the future degree of capital expenditure that is likely to be available, the prospect of building two Jubilee-Fleet lines—one into the East End and one down into SouthEast London—is to say the least remote in the foreseeable future.

Mr. Ronald W. Brown: My hon. Friend will be aware that in 1948 permission was given for the extension of a line from the Elephant and Castle to Camberwell Green and on to Lewisham from there. In fact, one and a half miles of tunnel has been dug and provided along the Walworth Road. However,

when the Conservative Government came into power in 1952 that scheme was killed. We therefore have one and a half miles of tunnel available. That scheme should have continued, but the Fleet Line has been given priority over the completion of that work.

Mr. Price: That may be the motivation that lies behind this, but my hon. Friend's memories of the Walworth Road go back much further than my own, and his experience in the London borough of Southwark as leader of that borough makes him very much more aware of the tunnels under London than I am. I had not realised that the tunnel went up the Walworth Road. I believe that it emphasises the point that I was trying to make. The history of public transport in South and South-East London is one of a determination to build a reasonable public transport system. That area never got the tubes, largely for geological reasons and the inability 100 years ago to dig under the type of subsoil that it is now possible to dig under. But each time that purpose gains a sort of infirmity of purpose, the thing never gets much further than the Elephant and Castle. Perhaps the Jubilee line will never get further than Charing Cross. It remains to be seen whether Sir Horace Cutler's pause—which perhaps should be christened a metro-pause, along the lines of a menopause—is actually a pause or is a full stop so that we never see the line get beyond Charing Cross.
Since the Second World War the story has been one of London Transport attempting to push into South-East London but being frustrated by the Tories in its attempt. I am particularly interested in this, not simply because my constituents constantly complain about the sheer impossibility of getting to work in Central London but also because the vehicles provided by London Transport and British Rail, and the conditions in which they travel, daily become worse.
One must speak of British Rail in this context, because in terms of capital expenditure in transport one must look at London Transport and British Rail together. British Rail has recently been reduced to handing out leaflets at the South London termini explaining to commuters why in their lifetime they will never get any improvement in services.


It is a sort of attempt by British Rail to defend itself against the cattle truck conditions in which it sends commuters to work daily. There have been small improvements such as the signalling scheme at London Bridge, but broadly speaking there have been no improvements at all. Some of the improvements proposed a year or two ago by London Transport, such as the express bus from Sydenham to Trafalgar Square, have melted into the Cutler snows—no doubt part of the metro-pause—and have disappeared. Therefore, the context in which one looks at this line is one in which there is absolutely no hope of my constituents in South-East London having their ordinary everyday conditions of travel to work improved in any way. Of course, we cannot divorce London Transport from the GLC, which we shall be discussing later this week.

Mr. Nicholas Baker: My recollection as a candidate in Peckham in South-East London, and fighting for the line to come down the Walworth Road, was that it was the Labour GLC which put the kibosh on that particular line.

Mr. Price: I think that my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown), who probably knows more about this than any other hon. Member, will sort that one out. I have never studied what it is like under the Walworth Road; nor, indeed, have I been a candidate for Peckham. I am glad that Peckham is now a stepping stone to the heights of the Tory Benches. I do not know the answer to the hon. Gentleman's intervention, but South-East London keeps having a decent transport system dangled in front of it and keeps having it taken away.
In talking about London Transport's intentions, one must talk about the policy of the GLC, because to a greater and greater extent London Transport is a creature of the spasmodic megalomania of the present incumbents of County Hall, If they have an idea, it goes ahead and then they chop it. It is only a few months since Sir Horace Cutler was prepared to build the Jubilee line out of his own pocket, but he has now invented a metro-pause to hold the thing back.

Mr. Ronald W. Brown: My hon. Friend is not being fair to Sir Horace. He did try. Sir Horace grumbled when my right hon. Friend told him to have his metro-pause a little while before May. Since then, the Tory Minister has told him to have a metro-pause. He is now experiencing some difficulty trying to explain to his followers how he lamb-basted the Labour Government when he now has to lambast the Tory Minister as well.

Mr. Price: I very much agree. I look forward to this gladiatorial combat between the Minister, who does not come from London and who probably knows little about it, and Sir Horace. We will see who wins in the end. But it is clear who has won round one. It has been won by the Department of Transport. Sir Horace is having to eat those many words he spoke about building the Jubilee line tomorrow.
I would like to put my finger on a bit of this megalomania that is at the bottom of this Bill. It lies in a publication which came through the letter boxes of many London Members of Parliament this morning. It is called "The 1988 Olympic Games feasibility study". It talks about the games based at docklands with access to the Olympic park. Coloured green in the Victoria dock is something labelled the Olympic park at Custom House station. I am not certain how much this document has cost to prepare. I am sure that our GLC colleagues will find out. It has been prepared over the past few months by the Greater London Council in an attempt to raise a bit of ballyhoo and enthusiasm for some of its promises, given when the party now in power came to office, proposing that London hosts the 1988 Olympic Games in an Olympic park built at Custom House in the Victoria dock.
That no doubt means the filled-in Victoria dock. Talking to some of the engineers, one realises that filling in some of the docks dug out in the nineteenth century by teams of navvies is a major engineering effort to which I am sure nobody in the GLC has put the slightest effort into working out. I know some of the architects who have been driven in frenzied haste to produce this glossy publication. Although Peat, Marwick, Mitchell and Company have been prevailed upon to write a little grey paper


at the back saying on the one hand that it is a good thing, on the other that it has problems but that it might be allowed to go ahead, it is nevertheless my view that the real pressure behind this desire, or the pressure at least to pretend to build, or make a show of being about to build, the Fleet line out to Lewisham, comes from these megalomaniac plans of Horace Cutler who knows that there is no real consensus in London about holding the Olympic Games in 1988. All his pretty plans of Olympic parks in the Victoria dock are just a piece of personal self-indulgence which he will have to eat and turn into an Olympo-pause just as the Jubilee line has turned into a metro-pause.
Although the instruction has not been selected, it was put to me that the words in the instruction and the idea in the instruction would be relevant for debate. I put down the instruction to give the broad view why we need to re-think this Bill and put it off for six months. The instruction reads:
That it be an Instruction to the Committee on the Bill to give special consideration to the need for a comprehensive rail transport system in dockland and south-east London".
It is my personal view that what has dogged public transport in London ever since we have had a decent public transport system in London is the appalling split between London Transport and British Rail. This goes back to the relationship between the London Passenger Transport Board and what is now Southern Region in the last century and just after the turn of the century when two separate spheres of influence were carved out. Herbert Morrison bust it only with the Morden line because he wanted to build the St. Helier estate and did a private deal and a bit of swapping around and managed to get one line south through London.
We have reached the point where, if we want to engage in this amount of capital expenditure or even lay plans for safeguarding routes by this amount of capital expenditure, we ought, at the very least, to do so in the context of a proper overall plan. Put shortly, we have an Inner Circle in London. It is time that we had a proper outer circle round the periphery of the city. This tunnel under the Thames afforded a supreme opportunity

to create a proper outer circle. But such is the difficulty of getting proper co-operation and proper discussions between London Transport and British Rail that this sort of decision, although it is not ruled out and might be possible in the future, has not been approached.
It is because my constituents in Lewisham will be deprived for ever of a decent journey to work, a journey they make every day, if this enormous amount of public expenditure takes place and especially if Horace Cutler's motorway and Olympic Games site are built, and because, even more, no plans have been laid for a proper link-up which could progressively be developed between the London Transport system and the British Rail system, that I felt it right to table a blocking motion on this Bill and then to table the instruction. I will listen carefully to the Minister before deciding what to do at the end of the debate.

7.57 p.m.

Mr. John Hunt: I find myself in total agreement with only one small section of the speech of the hon. Member for Lewisham, West (Mr. Price). That was the part in which he expressed his regret that, after all, the Fleet line extension which had been planned to go to Lewisham and into my constituency would not materialise. I agree with him that this is a great pity. As the hon. Gentleman will know, his constituents and mine suffer a great disadvantage compared with those who live, for example, north of the river who have the facility both of the underground and the surface railway. Our constituents are virtually dependent on Southern Region and are therefore that much more vulnerable when industrial action, weather hazards and other difficulties which daily beset our commuters happen. I agree with him totally when he expresses that regret. But it is something that we now have to accept. No useful purpose is served by debating the abandonment of that section of the Fleet line in this Bill.
My hon. Friend the Member for Streatham (Mr. Shelton) made a compelling case for giving the Bill a Second Reading. The hon. Member for Lewisham, West was less than generous in his comments about my hon. Friend's presentation. My hon. Friend took up the Bill at short notice. In the circumstances, his presentation of the case was


admirable and I congratulate him. I dissociate myself from the snide comments of the hon. Member for Lewisham, West.
My hon. Friend the Member for Streatham was right to stress repeatedly that there is no immediate financial implication in the Bill and that there is no commitment upon the Government or Parliament. It is more a question of safeguarding the route and of creating confidence for development and investment in dockland. We all want to see that development. It is vital if the ambitious plans for the area come to fruition and transform, as we hope they will, this derelict and neglected area of our capital city.
The dereliction of dockland, the vast acres which are subject to vandalism and decay, are not only a blot upon London's landscape but a grim monument to years of neglect and inertia by many authorities.
Dockland is a depressed area in every sense. Average incomes are markedly lower than they are in Greater London as a whole. Unemployment is consistently and significantly higher than elsewhere in the capital.
One of the major contributory factors is the inaccessibility of the area. It is that inaccessibility which the Bill seeks to overcome eventually. Many parts of the area are cut off from each other and from the rest of London because of the erratic and meandering course of the River Thames which dominates the area.
The new Jubilee line offers perhaps the first real chance of overcoming the accessibility problem without the creation of a vast motorway network.
The line will provide for the first time a direct underground link between the eastern part of the city and Central London. That link will do much for employment prospects in the area.
The potential for dockland remains immense. About 650 acres for development by industrial, commercial and service industries are available in the vicinity of the Jubilee line stations. Such development could provide up to 30,000 new jobs for people in the dockland area. That would transform this rundown part of London. For all those reasons, I hope that the House will give the Bill a fair wind and agree to its Second Reading.
Our recent history shows that many opportunities have been missed. I think of the third London airport and the Channel tunnel. I hope that we shall ensure tonight that London's dockland does not figure in that dreary catalogue of missed opportunity. We have a chance to take a major step towards the revival and rejuvenation of London's dockland. By establishing the route of the Jubilee line—which is what the Bill seeks to do—we shall enable the necessary planning and investment to proceed. That will be good news, not only for those who live in this neglected part of London but for the capital as a whole. I hope that the Bill receives an unopposed Second Reading.

8.4 p.m.

Mr. Nigel Spearing: The House knows that my constituency covers half the scheduled dockland area and has a greater mileage of projected Jubilee line in it than any other constituency.
I congratulate the hon. Member for Streatham (Mr. Shelton) on his presentation. He had little time to prepare. It is likely that I should have introduced the Bill, in the absence of my hon. Friend the Member for Woolwich, East (Mr. Cartwright), but for remarks made by the Secretary of State for the Environment about four weeks ago.
If we are to miss out in dockland in the way which the hon. Member for Ravensbourne (Mr. Hunt) suggested, it will not be because of failing to build the Jubilee line but because of the legislation which the Secretary of State has said he intends to introduce. The reason I am not introducing the Bill tonight is a result of the suggestion that there should be an urban development corporation.
The first part of my speech will be nonpartisan in the sense that it is nearly the same speech that I would have made had I been introducing the Bill. In the second part of my speech I shall explain why I am not introducing the Bill.
Everyone is agreed that there should be development in dockland. The question is: what sort should it be? Everyone is agreed that there should be better transport in dockland. The questions are: what sort of transport, where shall the


money come from and what type of facilities shall the community invest in?
Dockland is a transport paradox. The greatest and most important form of transport in London is the River Thames, which is the centrepiece of dockland. If it were possible for large-scale movement on the river to be quick, efficient and cheap, there would be no need for a Jubilee line or for so many roads. But there are technical difficulties. Perhaps some day someone will crack that problem.
I agree with the hon. Member for Streatham about the need to safeguard the line. My qualified support for the Bill makes no quibble about the need for the line. But we must also consider the cost. If we give a Second Reading to the safeguarding Bill tonight we shall have the opportunity to consider the cost later. However, if the House approves the Bill tonight, there is a danger that some people will say that the House has willed the Bill and use that to argue that this is the answer to the problem.
I have no doubt that the Minister will make comments about alternatives. One of the best alternatives, which would be cheaper, is to use the alignment of the old London and Blackwall railway at least for part of the journey from Fenchurch Street, through my constituency and almost to north Woolwich. That would provide a link to Central London at a fraction of the cost of building a tunnel. I have no doubt that we shall hear about those alternatives in due course.
The problem is that the Jubilee line is capital-hungry. The cost will no doubt be much greater than has been quoted if only because ground conditions might prove less advantageous than they seem. It is an area of heavily saturated gravel and although techniques are available for getting through this, as my hon. Friend the Member for Lewisham, West (Mr. Price) said, no doubt the additional cost, in the end, would be considerable.
There is also the question of phasing. I draw the attention of the House to the fact that in the major clause there are three works authorised. Work No. 1 is from Fenchurch Street onwards. The incidental cost of the line would partly be made greater because the cost of the

line from Charing Cross to Fenchurch Street would have to be part of the dockland section. That section would not be feasible on its own. Work No. 1 is from Fenchurch Street to Custom House, in my constituency. Work No. 2 is from Custom House to the projected depot at Beckton and the possible new town centre there. Work No. 3 is from Custom House to Woolwich Arsenal. It is to that section of the route which I draw the attention of the House because this is for a tunnel under the Thames which could be used at some time—indeed in the first instance—by British Rail trains.
My hon. Friend the Member for Lewisham, West talked about an outer circle. The fact is we already have an outer circle. One can get a train from Richmond to Camden Road and from Camden Road to North Woolwich. With only one change, one can make the whole of the northern orbit of London by rail. It is the intention of the Greater London Council, in due course, to electrify the line from Dalston to North Woolwich. If this Bill is passed, a tunnel between Custom House and Woolwich is to be constructed, first to continue that line to Woolwich Arsenal itself. That has been agreed though it is not specifically written into the Bill.
That is a plan to be commended because it would mean that we could get an earlier improvement of transport in dockland wholly to the advantage of the people of South-East London and those in my constituency. The only difficulty is that the interchange at Woolwich Arsenal would not be a physical one. The Bill, as it stands, would leave the train underneath Woolwich Arsenal in a single-line tunnel with an escalator, or possibly a lift, to the existing British Rail station at Woolwich. That would be all.
If one were building a standard gauge tunnel between the north and the south of the Thames as a first step—as has been generally agreed, and as is part of the GLC plans—one would expect the best value for money. It will cost about £30 million to join that tunnel with the Southern region at Woolwich, or somewhere to the east of it, and allow through running of British Rail trains; not least freight trains. I am sorry to see that that is not part of the Bill. It might be part


of the next one, and if it was I would certainly support that. I would perhaps give it greater support if that initial tunnelling was not just British Rail standard gauge but possibly that of l' Union Internationale des Chemins de Fer. If we had such a gauge we could perhaps, in due course, link up with some cross-Channel developments. Though I give a qualified welcome to this Bill, in terms of safeguarding, I think that the detailed execution of it could be improved in the way I have outlined.
There is also the question left open of how quickly the branch to Beckton would be built and whether it would serve the new town centre which is to be developed on that site. I know that the hon. Member for Streatham, who is promoting the Bill, can give no undertaking on that, but it would be a very welcome addition to transport in my constituency.
I come to the end of the non-partisan part of my speech which gives general support to the principle of the Bill, with certain qualifications. I must now explain why I am not introducing the Bill, as was my original undertaking if my hon. Friend the Member for Woolwich, East was absent. That, I think, is much more to the point in terms of the immediate timetable in this House.
Until four weeks ago the general outline plan for dockland was quite clear. It included the Beckton town centre in my constituency, which was part of the dockland strategic plan, drawn up by the Docklands joint committe. That committee was originally instituted by a former Conservative Government and a former Secretary of State for the Environment, the right hon. and learned Member for Hexham (Mr. Rippon). I do not very often agree with him but in this matter I think he chose a very wise course of action in bringing into dockland local government, the GLC and nominees of the Department of the Environment to produce an overall plan which would be acceptable to everybody.
The previous effort was that of the right hon. Member for Worcester (Mr. Walker), who appointed Messrs. Travers and Morgan to produce a plan for dockland in the early 1970s. They produced it in 1973 and it dissolved in a gale of laughter because it was demonstrably impractical. So the right hon. and learned Member

for Hexham came along and established the Docklands joint committee which, with extensive public and municipal consultation, produced a strategic plan. That plan, although not perfect in every detail, and not agreed by everybody, including myself, in all its detail, was found generally acceptable.
The Jubilee line was part of that plan and has been routed in relation to the plan's designations. Four weeks ago the Secretary of State for the Environment came along and told us that the Docklands joint committee and its strategic plan was to disappear and was to be replaced by an urban development corporation for docklands. Why? Because, he said, nothing was happening. That is just not true, and I hope that when the representative of the Government speaks tonight he will acknowledge that that was an untrue statement.
Over £40 million has been committed in my constituency alone in relation to that plan. Extensive public drainage works, at great cost to the Thames water authority, have been embarked upon, and one of the two drainage schemes is completed. Over a mile of new road has been laid over open land. Over 300 homes are being built in my constituency. It is utterly untrue to say that nothing is happening in dockland. It is also untrue to say that the local authorities were squabbling and so nothing was happening.
On the contrary, they had agreed among themselves that any betterment in rates as a result of the Docklands joint committee having an informal planning permission agreement would be pooled. I think that showed an earnest of their intent and of the extent to which they were willing to co-operate and get on with the job. The Secretary of State has now said that not only will this municipal-national-GLC co-operative be dissolved but its plan may well go with it as well.
I wrote to the Minister asking if he would ensure that the dockland strategic plan would remain and he said "No". He said that worthwhile schemes might go ahead but that no doubt the new urban development authority would wish to bring in its own scheme. I do not know whether the Government have considered this in relation to the Jubilee line, because the Jubilee line was part of that


plan. Presumably its line is fixed in the Bill.
If the Bill goes through tonight, that part of the plan may well remain. What, then, has the Secretary of State done? He has imposed two years' delay or more on the development which had started in dockland, just as the announcement by the right hon. Member for Worcester in the 1970s about his inquiry put a complete block on progress until that study was published. In the same way the Secretary of State has put a block on the present plan. Those who are now going ahead with the Docklands joint committee strategic plan will have to stop and draw back. Even small firms in my constituency have come to me in great annoyance because their plans have been set at nought by the right hon. Gentleman's announcement. These, however, are the sort of people that he claims to be helping.
The right hon. Gentleman issued a press statement which was not sent to Members of Parliament. When I wrote to him asking for further details he sent back a letter signed by a civil servant. I regard his action as an affront to the office of Member of Parliament and to the House of Commons. In his statement the right hon. Gentleman said that the new urban development authority, which he will appoint, will have planning powers and powers of land assembly. That is a nice way of saying compulsory purchase. He stated that the designated dockland area might well be extended. But that will not be done by the introduction of a specific Bill. It will be done as part of a general local government Bill. A great deal of the detail of the work of this new quango, which is being set up after the others have been destroyed, will be done by order. In other words, it will be a semi-dictatorial set-up from start to finish.
This will make a complete break with what we have been expecting in dockland. It puts a completely different complexion on the Jubilee line. Hitherto we had assumed that, even if the money were found, and even if the balance of investments were correct for the Jubilee line—and I do not want to go into that in detail—the developments which would take place there would be those which

had been expected and agreed. In my constituency there is the Beckton district plan by which an additional population of 22,000 is expected to come to the area in which construction would be half municipal and about a quarter each—or more if we can get it—of private or co-ownership housing. We do not know whether that will go ahead. I do not know whether, if the Jubilee line is built, it will serve that sort of estate, or something else.
Clearly, the Secretary of State has it in mind to sell off publicly owned land in the area—land owned by the Port of London Authority, British Railways and British Gas, and perhaps land owned by the existing borough councils. The right hon. Gentleman has not denied that possibility, but we shall have to wait to see the Bill. He will assemble the land and no doubt will make it available through the urban development corporation to the entrepreneurs and speculators whom the Government not only represent but wish to encourage. He then has the cheek to say that the corporation follows the lines of a new town development corporation. Of course, the opposite is true. That is partly because dockland is not a new town. There are lots of old towns in dockland. Second, in a new town the practice was to take extensive private property, divide it up according to a plan and make it available as a public asset. The right hon. Gentleman, however, plans to do the reverse, to take extensive under-used public assets and hand them, through the urban development corporation, to private bidders.
The right hon. Gentleman plans to replace the whole structure of local government in such an area. No longer will my elected local authority have the planning powers for that area. They will be handed over to the development corporation, which will no doubt provide lots of encouragement for lots of speculators to move in and try to make a great deal of money there. However, that will not be the sort of planning to which this country has been used since 1945. The whole purpose of the urban development corporation is to put the clock back to the position that applied before the postwar planning and land use consensus.
It is for those reasons that I was unable to introduce the Bill. Were I to introduce the Jubilee line Bill on the lines


that I have outlined as a sensible method of safeguarding the strategic railway that might ultimately be built to the advantage of all, I might find that I was introducing a Bill on a railway which was going to develop and foster something that the local people did not want and which would be politically highly controversial. I am afraid that the Jubilee line will now be seen, and can only be seen, in the context of the urban development corporation. If for some reason the Government change their mind—and we do not know what their thoughts are—the scheme will be seen as providing public money to assist private profiteering on public land.

Mr. Ronald W. Brown: A further point that my hon. Friend might consider is that if the urban development corporation goes ahead as a quango and "cons" firms to come on to the site, the Bill will give London Transport the right at a future date to take the land from them. The first impression these firms have is that they have security to go there under the quango system. However, they may find they will not have the security because London Transport will be empowered by the Bill to take the land from them.

Mr. Spearing: My hon. Friend may be right. That would be a further area of uncertainty, and there is great uncertainty in the whole issue. The intention is for the urban development corporation to have extensive powers which might even override existing statutes in respect of health and safety at work. I hope that that will not be the case. All that we have heard about the urban development corporation, however, is that it will make possible many of the features of the so-called enterprise zones which were suggested over a year ago by the present Chancellor of the Exchequer in a speech to the Bow Group.
To be party to introducing the umbilical cord from central London to such an aparatus has made it impossible for me to introduce the Bill. I give my apologies both to the parliamentary agents and to London Transport for the additional difficulties that they have had. I am not sure that I should apologise to the hon. Member for Streatham. If he votes for this animal, the UDC, he will have been consistent at least. We shall

have to see what he does. I do not extend my apologies to him because the philosophy of the UDC may well be to his liking, and he has been consistent in introducing the Bill.
I hope that the UDC will not turn out to be the sort of animal that I have depicted, but I fear from what we have read, what little information we have been given so far and what we know of the Government's intentions, that it will be. If it is, and if the Jubilee line is built, that can only sustain and increase the purposes of that corporation. That will not be to the liking or to the advantage of the people of East London.
The Minister must tell his right hon. Friend, who, I understand, viewed this area from a helicopter, that the UDC will be bitterly resented not only by the people of East London but by those in local government everywhere. It will be imposed on an unwilling populace by a Government who, on one hand, talk about freedom for local authorities but, on the other, dismantle one of the most promising forms of co-operation between different forms of local government in inner city areas anywhere in the world. For those reasons I cannot, unfortunately, commend the Bill to the House, but I shall not oppose it.

8.33 p.m.

Mr. Frank Dobson: I shall speak briefly about responsibility for the transport system in London, which much concerns me. If one went out into the street and asked someone "Who is responsible for the transport system in London?" the response would be along the line of "God knows who it is, but he is making a mess of it."
One of the major problems with London's transport system is the multiplicity of authorities that are partly responsible for the system. We have the London Transport Executive that is responsible for operating most of the buses and the tube system. British Rail is responsible for operating the railway system. The GLC has some financial and policy authority over the London Transport Executive. The Government, or the Department of Transport, have more influence than the GLC on London Transport because they are the source of the money.
The London boroughs are heavily involved in traffic and provision for buses because of their influence on the roads. The effect of traffic on London's transport involves the Metropolitan Police. That is a perfect recipe for buck-passing. It characterises everything anyone tries to do about improving the standard of transport provision in London. Immediately one goes to those authorities and asks "What are you doing about X, Y and Z?" they immediately say that the other authorities are not pulling their weight.
A public meeting was held in my constituency recently by an active Roman Catholic church. The church intended to hold a meeting on all sorts of issues and democratically decided to ask those who attended the church what they considered to be the most pressing matter, there being many pressing sources of bother in my constituency. They decided that the most pressing matter was the total unreliability of the No. 68 buses.

Mr. Ted Graham: And the 63s.

Mr. Dobson: Their leaflet asked "Have you ever waited ages for a 24, 29, 31, 46, 68 or a 214?" The answer at the public meeting was "Yes, everybody has waited ages for all of them."

Mr. Ronald W. Brown: Will my hon. Friend suggest to his constituents that they might well urge the GLC to authorise London Transport to manufacture its own buses so that we get the buses that we want?

Mr. Dobson: I was intending to touch on that matter.
Present at the meeting was the general manager for our area of London Transport. I was impressed by him, as were most of those who attended the meeting. He explained that one of the reasons the buses were bad was that the vehicles bought by London Transport were unreliable. He also said that there were severe staff shortages, and asked "How can you get the buses from South Croydon to Chalk Farm and back again in view of all the other traffic demands on the roads?"
In a sense he was saying that there was not much that he could do. Some of the faulty vehicles were bought because the

Labour Government who went out of office in 1970 insisted in 1969 that London Transport bought vehicles which would be used throughout the urban areas but were quite inappropriate for use in London. The London Transport Executive should have stuck out at that point and said "You can stuff your unsatisfactory buses". Unfortunately, it did not do so. Therefore, we have vehicles with doors at the front and in the middle, where there were no doors before. It follows as night follows day that if there is an electrical fault on those doors the vehicle is out of action. We should revert to simple buses.

Mr. Christopher Price: That is not the reason I was given. The LTE said that the new buses would not fit the maintenance pits designed for the old buses. Therefore, new pits must be constructed to take the new buses. I am always given that reason for the shortage of buses in my constituency.

Mr. Dobson: The purchase of buses that do not fit the pits in the maintenance depots must be the responsibility of the London Transport Executive, whatever the Government or the GLC may have done.
When we refer to staff shortages we receive the reasonable answer from the London Transport Executive that pay has been restrained as a result of successive Governments' pay policies and that unsocial hours are worked by the drivers. The London Transport Executive has a limited amount of control over those matters.
As to the traffic problems in London, a multiplicity of people are responsible for the shambles on our roads today. London would benefit if the Government abolished one or two organisations in the list that I read out earlier. I am on record constantly as calling for the abolition of the GLC. The removal of that little bit of organisation would be useful. It has little role in relation to London's transport unless the Government provide it with the money to do what it wants. We could eliminate the GLC and put the responsibility straight back to the Ministry of Transport.
I now refer to clauses 3 and 24 and schedule 3. My points relate to offences and the construction of new ticket halls.
I am sponsored as a Member of Parliament by the National Union of Railwaymen. I have been asked by the union to raise the problem of assaults on London Transport staff. There are substantial numbers of assaults by members of the public on individual working men and women going about their business of trying to provide a decent transport system in London. In 1973 there were 1,052 assaults. There was a decrease in 1974, when the figure was 1,031. About 1,200 members of the London Transport staff were assaulted in the last year for which there are figures. In addition, a considerable number of British Rail staff were assaulted in the course of their duties in London. That is regrettable and indefensible.
I must emphasise that a great deal of the "duffing-up" of the London Transport staff is associated with the sale of drink and football matches. With deference to any Scots present, the thought of the England-Scotland match at Wembley does not loom in the minds of most people working for London Transport as the prospect of a feast of football. It looms in their minds as a threatening and unpleasant two or three days when they take life and limb in their hands when attempting to collect fares and persuade people to behave themselves on London's transport services.
Something must be done about that. The management of the London Transport Executive and the unions involved agree. They had a welcome meeting with the Home Secretary on 2 October. The Home Secretary promised to set up a working party of all those involved to discuss the issue. He said that he did not want it to become a talking shop. That is important—although all meetings of necessity involve a great deal of talk, and no one can take action at a meeting. We need a vigorous approach from everyone involved, including all the authorities that I have listed, to make sure that the position does not get out of hand or become as bad as it is on the public transport systems of other major cities in the world.
If we compare London with New York, it would seem that we are living in "Easy Street". There are 175 police employed on the London Transport underground system in an attempt to maintain law and order and to ensure that citizens and staff

going about their business, are not assaulted. In New York, 4,000 police are needed. We have a long way to go before our position is as bad as it is in the city which represents the quintessence of the free market economy and everything that goes with it.
I urge on London Transport, on the Minister, and on anybody else who has influence in these matters the need to consider the consequences, for the safety of members of the public and members of staff, of any proposals for staff economies or for the provision of fully automated ticket halls. It is quite clear that if there are two or three staff around on a deserted underground station late at night—for example, at Rotherhithe and Shadwell—the odd drunk is much less likely to assault the ticket collector. The statistics show that there is no example in history of a ticket machine coming to the aid of a member of London Transport's staff when he has been assaulted. Only other human beings can come to the aid of someone who has been assaulted.
We have to remember, therefore, when we are considering the economies which can be effected by reducing the manpower on our transport system the consequences that they may have for the safety of staff and passengers. I hope, therefore, that everyone concerned with the future of London Transport will remember that the best way to ensure the safety of staff and the travelling public is to have a reasonable number of staff around at all the stations. When a couple of people are out to cause trouble late at night, they are much less likely to do so if there are staff watching and able to give assistance to anyone who is attacked.

Mr. Clive Soley: Does my hon. Friend agree that it would have an additional advantage? We know that vandalism takes place when no one is around to observe what is going on There is much to be said for having as many staff as possible on duty in order to prevent outbreaks of violence and vandalism. Economies in the use of staff are often false economies and lead to the lowering of the quality of life and of the transport system generally.

Mr. Dobson: I entirely agree with my hon. Friend.

8.44 p.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): It might be helpful if I intervene at this stage, although any intervention by me is in no sense a reply to the debate, because my hon. Friend the Member for Streatham (Mr. Shelton) is the sponsor of the Bill. I congratulate him on the way that he has presented it and on bringing it before the House.
I propose to give some indication of the Government's general attitude, which is one of welcome to the powers contained in the Bill, and to explain what lies behind the Government's approach to the problem and also to the problem of dockland, with which it is closely associated.
As my hon. Friend has made clear, the Bill is aimed at taking power for the construction of stage 3 of the extension of the Jubilee line. That will be an extension eastwards from Fenchurch Street. The Government accept that, should it be possible at some time in the future to construct the third stage, it will be valuable to have the powers contained in the Bill. They will enable progress to be made more quickly if the opportunity arises for it to be built. As my hon. Friend has explained, it will have some safeguarding effect on the route, ensuring that it is protected against developments that might ultimately prove costly for an underground line and for people involved in developments of the sort feared by the hon. Member for Hackney, South and Shoreditch (Mr. Brown). It would be unfortunate if people were to discover that they had erected a substantial building under which there were proposals for a tube line. Therefore, it will be valuable to have these powers, and I commend the Bill to the House.
I must echo what my hon. Friend the Member for Streatham made clear when he introduced the Bill—namely, that there is no commitment of funds by the Government or the GLC to go ahead and build this extension of the Jubilee line. In the present financial climate, there can be no acceptance of the eligibility of Government funds for any project of this kind for transport supplementary grant. Obviously, the financial problems involved in the construction are formidable and will have to be faced at a later stage.

That will be in line with the history of the Jubilee line.
The House granted powers for the construction of stage 2 of the Jubilee line from Charing Cross to Fenchurch Street as long ago as 1971, but it has not been possible, because of the heavy capital investment involved, to make progress with that construction. Earlier this year there was a proposal that £24 million might be included in this year's money Bill to enable work to begin on stage 2 of the Jubilee line. That proposal, which had to be considered by the new Government with the GLC, was withdrawn after agreement between Sir Horace Cutler and my right hon. Friend the Minister of Transport. That gave rise to the pause which hon. Members have discussed, and that is the situation now regarding the development of the Jubilee line.
The position was discussed between Sir Horace Cutler and my right hon. Friend and full agreement was reached that, in the present financial climate and considering the massive capital investment that the Jubilee line as a whole represented and the financial difficulties that the Government inherited, it was right to pause at this stage before committing £24 million, which would be only on the start of stage 2—by no means the complete cost of stage 2—and to look at low cost alternatives which might produce some quicker and more efficacious relief for dockland's transport problems. There was no secret about that agreement. I can refer the hon. Member who queried it to the press statements issued at the time. Indeed, my right hon. Friend announced the agreement that he had reached to the Docklands joint committee at one of its meetings that he attended. I am sure that the hon. Member for Newham, South (Mr. Spearing) will be glad that he chose that forum to make an announcement of what was envisaged.

Mr. Ronald W. Brown: We have heard about the agreement that was alleged to have been made, but it was a different story from what we heard from Sir Horace Cutler. Nevertheless, he accepted a pause for six months. Do I understand that the Government will make a decision in two months, as four months of the six months have already elapsed?

Mr. Clarke: I shall explain the progress that has been made in considering the options in a moment. There is no set time limit on the pause. However, the various options that we are considering—the low cost alternatives—will be considered reasonably speedily. The first results of the work should be to hand by the end of this year. By early next year we should be in a position to make some decisions, because by that time the Government will have finalised their public spending plans and will be producing proposals on transport in line with those new public spending plans.
I should like to make clear what we are doing. The purpose of the options being considered—indeed, the whole purpose of the Jubilee line at this stage—is that something should be done about the transport needs of dockland and to some extent of Thamesmead, which lies within the constituency of the hon. Member for Woolwich, East (Mr. Cartwright), who unfortunately is absent today.
I should like to defend Sir Horace Cutler against some of the attacks made upon him by the hon. Member for Lewisham, West (Mr. Price). In all the discussions that I have been familiar with about the Jubilee line, the question of the Olympic Games and so on has never been paramount in anyone's mind. This is not part of some megalomaniac scheme as the hon. Member for Lewisham, West suggested.
Everyone is extremely concerned about the problems of dockland. They are uppermost in the minds of Sir Horace Cutler and members of the GLC. We are now considering low cost alternatives for the transport needs of dockland. The Government certainly believe that it is urgent to make some progress in reviving that derelict area to which considerable reference has been made during this debate.
A major step that the Government have taken is to announce their intention to set up an urban development corporation for the dockland area.

Mr. Leighton: I saw a press release given by the Minister of Transport which announced that he had had a meeting with Sir Horace Cutler and that other alternatives were considered. That was quite some time ago. Will the Minister give us some indication of what those alternatives are?

Mr. Clarke: The understanding was arrived at on 25 June, the date of the announcement made at the meeting of the Docklands partnership committee. It would not be right for me to canvass alternatives in the debate this evening. A review is taking place which is making good progress. I am told that various options have been identified for joint study by our Department and the GLC, in consultation with London Transport, the dockland development organisation, British Rail and the dockland boroughs. All those bodies have been involved, either by way of consultation or directly, in the discussions when looking at low cost alternatives. The best thing to do is to wait for that work to make some progress and produce some results, when an announcement can be made later in the year. That would also enable the Government and the authorities to develop priorities for dockland as a whole and to match them up to our view of public expenditure over the next five years.
We must look at the needs of dockland. Everyone is agreed that there are important transport deficiencies in the way of reviving dockland. Providing the proper transport infrastructure is a key point in getting the dockland strategy moving. It is not possible to look separately at transport proposals such as the Jubilee line or the various road schemes that have been proposed on the one hand, and a general dockland strategy on the other. That is another reason why we have asked for the pause, so that we can look at low cost alternatives and achieve some clarity regarding the actual nature of the development in dockland and what is most needed there, and match transport plans, within the resources available, to whatever is forthcoming.
The urban development corporation has been mentioned.

Mr. Christopher Price: rose—

Mr. Clarke: I will give way in a second. I just want to deal with the urban development corporation, because it has been mentioned and attacked on the basis that the hon. Member for Newham, South disapproves of the idea anyway and suggests that its creation will give rise to delay. That is certainly not the Government's intention or belief.
The creation of the urban development corporation is the responsibility of my right hon. Friend the Secretary of State for the Environment. A proper debate upon it, and a proper and full explanation of the Government's position, will have to await the legislation when the Secretary of State presents enabling powers for urban development corporations of the kind that he described.
Criticism was made of a remark to the effect that nothing was happening in dockland at the moment. That may involve a certain amount of licence, because plainly the Docklands partnership committee is making some progress. I say to the hon. Member for Newham, South that nobody could be complacent about the progress that was being made in dockland. It really was not adequate to the needs. My hon. Friend the Member for Ravensbourne (Mr. Hunt) said that it was a terrible disgrace that such an important part of the capital city is still in such a bad condition and that we have not yet begun the proper revival of that area.
Whilst good progress has been made in some ways, there has not been enough progress in getting private investment and industrial activity developing there, and the general purpose of my right hon. Friend's initiative in setting up the dockland development organisation was to try to get some sense of urgency and real decision-making into the problems of dockland in order to revive the area. Whatever we decide about transport, and whatever comes out of the present discussions between London Transport, the GLC and ourselves, will be completely aimed at trying to provide the necessary transport infrastructure for dockland.

Mr. Christopher Price: I was pleased with the Minister's reference to the Olympic Games plan as not being a particular priority. Is he saying that, in all the discussions he has been talking about concerning the reappraisal of the transport and other needs of dockland, this feasibility study about the Olympic Games is not playing a part at all and that the reappraisal is taking place as though it does not exist?

Mr. Clarke: I am not saying that. The burden of the hon. Gentleman's speech was that the furtherance of this project and, indeed, the Bill were somehow

needed to further the project for having the Olympic Games in London. If there was any project for the Olympics, clearly it would pose transport problems which we would have to look at. But uppermost in the minds of the GLC and of ourselves, and dominating the discussions, has not been the Olympic Games proposal, which is still only a study and a possibility for 1988, but the problems of dockland, of Thamesmead and elsewhere. I was answering what I regard as a fairly slight point that somehow this matter should be dismissed as a grandiose notion of Sir Horace Cutler by pointing out that our purpose is the broadest serious proposal for the redevelopment of South-East London.
I was dealing with the role of the urban development corporation and denying that its creation will lead to unnecessary delay. I was making it clear that our transport proposals will be geared into whatever is decided on the broader development of dockland and what can best further it. There is no reason for delay. My right hon. Friend has made clear that the new road developments will go ahead as quickly as possible because it is plain that they are essential to the revival and regeneration of the area.
When one comes to road schemes, one is dealing with different facets of transport needs of the area. The major difference between road schemes of the sort that have been discussed and put forward, on the one hand, and an underground railway, on the other, is that the road schemes can handle goods and industrial traffic in addition to passenger traffic. One of the difficulties with dockland is that there has not been a sufficiently fast attraction of industrial development and, indeed, job creation. We have to look at the necessary road network as well as the rail passenger network in order to ensure that the area can be served properly.

Mr. Spearing: That is why, in dealing with the question of freight, I mentioned the linkage point with the tunnel. Will the hon. Gentleman make representations to the Secretary of State to the effect that, if there is not to be the delay which he denies that there will be—I assert that there will be delay—the best way is to accept and continue the strategic plan already worked out by the Docklands


joint committee and that in particular the district plan in my constituency should go ahead as planned?

Mr. Clarke: I cannot answer for my right hon. Friend the Secretary of State for the Environment on the details of the urban development corporation that he is working upon, but I will ensure that the point raised by the hon. Gentleman is put to him, although I understand from the hon. Gentleman's own speech that he has had a reply making it clear that one cannot set up a new urban development corporation in order to make a fresh start and the next moment saddle it with clear commitments based on past plans. But I will put the point to my right hon. Friend and try to ensure that the hon. Gentleman gets an answer to his request.
I was about to identify the schemes which are to be pressed ahead by the Department in developing the transport infrastructure of the area. Two schemes in the trunk road programme are to go ahead as fast as possible. The first is the proposed new link between the end of the M11 at South Woodford and Hackney Wick and the extension of the North Circular road to the A13—the extension usually known as the South Woodford to Barking relief road. Both are in the trunk road programme. Both will be given priority in line with the Government's road programme, which is to give priority to industrial routes.
We have recently added to the trunk road programme an extension south of the South Woodford to Barking relief road. That is the East London crossing project. We are commencing work on the problems concerned with a trunk road scheme extending from the A13 south to a link with the A2 on the other side of the river on the East London crossing.
There have been discussions with the GLC about the southern relief road, to which the GLC attaches great importance. It is for the GLC to decide on that road, but if it brings forward proposals for it as part of its programme, we shall consider them sympathetically. We are urgently considering those matters with the GLC.
We are, however, engaged in a study of alternative lower cost options to the Jubilee line. It is prudent for the Government and the GLC in the present financial climate to explore lower cost

options before committing funds to stage 2 of the Jubilee line. An estimate was given in the course of the debate of the total expenditure for the two stages of the Jubilee line required to be built to complete the scheme of over £300 million. That is a considerable financial involvement and capital investment that will have to be diverted from other transport investment if the scheme went ahead.

Mr. Ronald W. Brown: That evidence was available before the scheme started. Why does the Minister believe that it only became a great issue after May? Everybody knew about the cost and argued against it. Why does he believe that after three years of gestation the GLC will now bring forward a cheaper option?

Mr. Clarke: I am not saying that the scheme is new. It may not have come as a revelation to everybody. When the money Bill was considered in May the Government considered it prudent to look at lower cost alternatives before that first £24 million was committed. If the hon. Member for Hackney, South and Shore-ditch agrees that it was right to review the total cost of the scheme before it was taken any further, he should have no complaint now.
Suspending stage 2 does not mean that we are not examining further options. It may be that eventually we shall find a more effective use of the projected capital for the Jubilee line. Meanwhile we have agreed with the GLC—and I am happy to commend it to the House—that we should not cause unnecessary delay to the Jubilee line if we decide to proceed with it. Therefore the House should give a Second Reading to the Bill, as it preserves the position if we do go ahead with the scheme.
If the Jubilee line is persevered with, the next stage would be stage 2, which would involve the construction of an underground railway that virtually duplicates the existing system from Charing Cross to Fenchurch Street. It would involve considerable expenditure before one even considered the proposed line east of Fenchurch Street, penetrating dockland, where the real problems lie.
It is prudent to look at the options and in the present financial climate some of them may have to be more fully explored before the Jubilee line can be


taken further. This is not the occasion to canvas alternatives, and it would not be helpful if the Government were to fly kites as to possible options. The study of options is being pursued urgently, but it is not intended that the Government should have a talking shop among the bodies involved before a decision is reached. I hope that by the end of the year we shall have a clear view of the alternatives, the resources available and the kind of development that will take place in dockland to which the transport facilities can be matched.
It is as part of that exercise that I would commend the Bill to the House and agree that it is a useful contribution and an additional option which might one day be pursued if we give the GLC the powers it seeks.

9.5 p.m.

Mr. John Prescott: I approach this debate with some trepidation, particularly as I am not a London Member. This is certainly a somewhat controversial subject, and one's attitude depends on where one resides and one's feelings about the extension of the underground system.
I speak in this debate as an ex-seaman. This matter is of particular interest to me because I could never understand why, when I was sent to join a ship in the King George Road docks, I had to change from train to tube to bus and then to another bus. Perhaps this state of affairs is explained to a certain extent by my hon. Friend the Member for Lewisham, West (Mr. Price), who said that there was a considerable lack of integration between two public authorities here in designing a proper and adequate transport system for this part of London. Nevertheless, I could never understand why I had to make so many changes.
The London underground system is a very good transporation system. I have been working in Europe during the last few years and I have had the opportunity to compare our system with those across the Channel. Ours compares very favourably, bearing in mind its many operating difficulties. The best that we have in London is as good as any underground system in existence today.
I congratulate the hon. Member for Streatham (Mr. Shelton) on the way in

which he presented his case. Our hearts went out to him when he was asked a difficult technical question to which he did not know the answer. We all face that problem at some time in our careers.
The hon. Member demonstrated that this debate is about the fundamental problems of city planning and the way we handle the important transportation systems that service our industrial and social developments. If this Bill is passed this evening, it will reserve a planning route. It is the same Bill that was being considered when a Labour Government were in power, and it makes clear that there is no commitment to finance. The Minister has also made that clear tonight, as has the sponsor of the Bill. It is the same principle that was agreed when stage 2 powers were passed for the Charing Cross to Fenchurch Street part of the line.
Anyone who looks at the impressive intentions of this Bill, as seen in the documents that come with it, will believe that it is designed to assist in redressing the balance in housing and high unemployment and remedying deficiencies in the social and economic environment in these areas, bring together the areas of high and low income, develop the final transport system to join up the various odd parts that are clearly not integrated at present, and overcome the problems of river separation and access to other regional areas. Indeed, it is hoped—and this is perhaps a little optimistic—that it will be a major catalyst for the redevelopment of the declining inner city area. Finally, it is claimed that it will give confidence to the investor. I seem to have heard all those arguments before. They were given in respect of the Humber bridge in my area. I was highly sceptical in the early stages of that project, and to a degree I still retain that scepticism. Most of the facts seem to back me up. Nevertheless we have it, it is a wonderful British engineering achievement and something that will provide benefits.
But the problem with all these investments is the cost. No one can really tell what the cost of such a project will be. All we can do is suck it and see. Indeed, the Humber bridge began at £12 million and now its estimated capital debt, which will be paid off in 40 or 50 years, is something like £500 million. Soon the cry will go up that this money


cannot be paid by tariffs and that the interest charges are too great. Therefore, help will be sought from the Government with financing and maintenance problems. I am sure that the Minister, or one of the Government Departments, will receive this kind of call, with which I have considerable sympathy. That is not to say that it does not make an economic contribution to the area. That is the point at issue and the point drawn in favour of the Bill.
Supporters of the Bill include the Dock-lands joint committee, the GLC, London Transport and a number of the unions. The Government have clearly stated their position tonight, but I was much more impressed by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) who made clear the inevitable fact that much of the information has been available for a long time. Even certain parts of the re-routes that have been referred to were original routes. Therefore, many of the surveys and information had only to be redated to assess costs. We can understand that the Government may be reluctant to give an immediate decision on a project of this scale and commit themselves to it. They obviously wish to buy as much time as possible for this sort of investment expenditure, particularly when other areas of public expenditure such as hospitals and schools are being cut in their priorities.
Nevertheless, the Government's position is somewhat similar to that of the previous Labour Government, who never gave a categorical "No" to the proposition. My hon. Friend the Member for Newham, South (Mr. Spearing) could have moved the Second Reading but would not, for the adequate reasons that he gave. Certainly he was in some doubt, as were the Labour Government, about whether the development should be considered in isolation. Indeed, the Minister has made the point that there are other options to be considered and he has asked for more time in order to do so.
Certainly, the Government's position has neutral overtones. However, no Government can possibly be neutral on such matters. It was interesting to note that the Minister made clear that he would not consider that such a project would have a claim for a TSG in his speech about those grants at the Eastern

region annual consultative committee at Cardington. He stated:
It is certainly not our intention to use the TSG settlement, as Labour Ministers did, to seek to control the detail of individual counties' transport policies.
It is clear that the way in which the development is financed will influence whether the project is built. The project cannot go ahead without the Government giving it a fair wind. All we are doing tonight is providing powers in the Bill. Everybody has fallen over himself to say that that does not mean commitment.
As a non-London Member, I remember reading in the newspapers that it was the Labour Government who were preventing the building of the Jubilee line and that everything would be solved when the Tory Government came to power. There must have been an interesting conversation between Sir Horace Cutler and the Minister deciding upon the Government's attitude towards the project. I hope that the Minister will be able to indicate whether British Rail and other authorities involved, such as the National Bus Company, which could be affected by such investment, hold opinions about the development of the Jubilee line. It has been stated that British Rail would lose about £4 million in revenue. I hope that the Committee will be told how the authorities feel about the matter.
The Government's position on public expenditure policies and cash limits will clearly determine whether the project goes ahead. The Minister has said, fairly, that it would have to be viewed against other priorities in public expenditure. Again, the Government will be the final arbiter in the decision on whether the Jubilee line will be built. There will be a cardinal difference between Labour Members and the developing policy of the Government once more is heard about the proposed urban development corporation and the consequential effects upon the inner city development programmes. I am referring to a transport connection to deal with inner city developments. That proposal has been claimed by the Bill's sponsors and put forward by the Minister.
The previous Labour Government and my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), as Secretary of State for the Environment, had


a positive approach to inner city development and more money would have been needed to make that policy fully successful. We developed and to a certain extent built on to the Docklands joint committee, which was set up by the right hon. and learned Member for Hexham (Mr. Rippon), with our partnership scheme in which the Government were involved with the joint committee, which included all the local authorities in the area.
The specific purpose of that scheme was to redress the glaring deficiencies in the economic and social fabric of the area. It involved a review of the whole transport strategy in the area in consultation with the local authorities responsible for making decisions about their own areas. There was also consideration of whether the area should be considered as an offshoot to the development of the Channel tunnel or as a freight development area.
There is a considerable difference between our approach to the development of this important inner city area and the approach that seems to be developing in the Government's policy, which is introducing even greater uncertainty.
The Government seem to be suggesting that the lack of effective development was due to delays in decision-making, though they admitted in answer to the protests of my hon. Friends that there had been some development. My hon. Friend the Member for Newham, South pointed out that a lot of development has taken place and the Minister replied that the decisions had not been taken quickly.
As in all these cases, the problem is mainly money and not delays in decision-making. Uncertainty is another factor that tends to undermine decision-making and development in inner city development areas, even under present policies. One example is the uncertainty about what is to happen to the Port of London Authority, the structure of which is being looked at by the Government.
The most important matter of concern is the urban development corporation. So far we have had only a press statement about the likely role of the corporation, but it is clear that it will do away with the joint committee and the partnership scheme. The corporation will also be given considerable planning powers, and

although I do not know how that will affect the Bill, I imagine that London Transport will be pleased to get the measure through before the corporation is set up with its powers over planning and the purchase of land.
It is clear that the corporation will be given considerable powers affecting housing and industrial development. I get the feeling that it will be a sort of private land bank which will buy all the land belonging to the public sector and flog it off to the private sector. Land speculation will take place on a considerable scale. We know from the experience at St. Katharine's dock that development by private corporations results in housing that is far too expensive for most people.
It seems that the Government are following the policy embarked on in 1971 by the right hon. Member for Worcester (Mr. Walker), who attempted to introduce similar plans. The right hon. Gentleman referred to his scheme as putting the West End into the East End. There is a fundamental difference in our approach. We are concerned less with making the East End accessible to West End commercial development than with how we can raise the standard of living of the people in dockland. With the current planning and thinking, the Jubilee line will be turned into a Klondyke line—a ride to a place for the get-rich-quick club.
We have seen throughout the 1970s what happens when land is released to speculators, but it seems that the lessons have not been learnt. We recognise that the Bill seeks powers only for planning reasons and does not provide that building will take place. But there are powers to start building operations. It is just a matter of securing the money. I understand the reasons why the authority is asking for these powers, and I understand the planning considerations for them. Nevertheless, Labour Members are much more concerned about what the purpose of the Jubilee line will be. One hon. Member has already made it clear that he will judge the success and potential of the development of the Jubilee line by the effect that it will have on the dockland area with which it is connected.
I therefore hope that the Minister will make clear, either to the Committee or to the House, what he considers to be the viability of this project. For example,


£300 million investment at rates of interest that have begun to increase since the Government came into power will presumably mean an increase of £60 million for every year of delay, if not more. That relates to the cost of the project at 1979 prices. There is clearly an important demand on resources, which in itself makes this a matter of national interest. The Minister has made it clear that this development will be competing with other important developments.
I want to make it clear that in passing the Bill tonight Labour Members have not made a decision to build the Jubilee line. Such a decision will have to be taken in the context of the London strategic transport plan. Most important of all, that decision will depend on what the urban development corporation will do, what powers it will have and for what purpose it will use those powers. If it simply uses them to create land speculation, to do in the East End what has been done in the West End, and if the line is denied the opportunities to reduce the glaring inequalities in the East End of London, we shall seriously have to consider whether we can give our full support to such a project.

9.22 p.m.

Mr. Ronald W. Brown: I congratulate my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) on his intervention on our behalf. Labour Members from London believe that this is a cynical Bill which has no intention of doing anything. There is no intention of spending any money or of fulfilling the Bill's orginal purpose. Indeed, the Minister tried to interpret what is going on by saying that it was only a pause. I intervened at that stage to determine what that pause was.
I can tell the Minister that the GLC does not believe him. The GLC was very angry when the Transport Minister in the Labour Government advanced the same arguments to Sir Horace Cutler as the present Minister has done. Sir Horace was quite rude and abusive about my right hon. Friend because he chose to argue that the scheme should be reviewed. Of course, Sir Horace argued in the Evening News, the Evening Standard and by press release that the GLC had done

that and that this was the best scheme for London. The Minister must therefore be aware of that fact. I believe that tonight he is being less than honest in suggesting that there is something new about the proposal that the GLC should look at this in depth, especially when Sir Horace has already said that that is what has been done. Does not the Minister read the Evening Standard? Do not his officials provide him with briefings? There are enough of them. Therefore, his assurances tonight were rather shallow. We cannot accept them.
Sir Horace was quite clear. In fact, he changed the name from the Fleet line to the Jubilee line because he believed that it would go somewhere and that it would go with his knighthood. I am astounded that on his behalf the Minister is now able to say that it was all a bit of moonshine, that Sir Horace did not really mean it, and that he only wanted a knighthood but not the ride. I do not believe that Sir Horace had that in mind.
I must point out that the Minister does not come from London. I could have followed the hon. Member for Hampstead (Mr. Finsberg), because he and Sir Horace are close friends. The Parliamentary Secretary does not have the advantage of being a London Member, and I must tell him that with regard to the Olypmics Sir Horace actually means what he has said. Some may think he is stupid. I do not. I think he is a man of great ability and that he is trying to do something for London. He has not done much so far, but perhaps he wants to do something by the end of his time on the Greater London Council. He actually means it. The Minister said Sir Horace did not really mean it. We will see that he is challenged at the GLC next week to ask whether he is aware that the hon. Gentleman has said that he did not mean it, and that it was all a bit of a laugh.
A vast sum of money was spent on the feasibility study. Sir Horace occasioned that. The price of that study, if one is stupid enough to pay it, is £10 for each copy. The Minister is prepared to sit on the Government Bench tonight and defend his friends across the river for saying that they could waste public money on a feasibility study and to pay £10 a copy for something he did not mean in the first place.

Mr. Kenneth Clarke: I should make clear that I did not say anything about whether he means the Olympics or not. The plan for the Olympics in 1988 is not the responsibility of the Department of Transport. I was saying that this feasibility study has not featured large in our consideration of the Jubilee line. What I said happened in May was that Sir Horace Cutler was enthusiastic about the line and would like to see it furthered. But in the light of the financial circumstances in May this year, when a decision had to be made about whether the money Bill should include £23 million to begin the project, we asked him, and he agreed, to have a pause while we looked at low cost options and looked at the whole thing in the context of dockland development. The hon. Member for Kingston upon Hull, East (Mr. Prescott), on behalf of the Opposition, seemed to be advocating precisely what the Government and Sir Horace have agreed. He was arguing that the whole thing had to be seen in the context of what happens in dockland and in the context of other claims on resources nationally and in London.

Mr. Brown: I am grateful to the hon. Gentleman. I am sure that his second speech will not match his first. I am sure that I recall exactly what his first speech will say when it appears in Hansard and what he said about Sir Horace. I am interested to note that already he appears to be making his peace with Sir Horace and that he did not really mean what he said. I am bound to tell him, whatever his departmental officials may say, that Sir Horace Cutler was absolutely clear that they had considered all the alternatives. They were all canvassed and this was the best one for the job to be done.
I do not place any reliance on the arguments that we can now go back through all the low cost options, which have already been rejected by the GLC, in favour of this one. I challenge, with my hon. Friends, the whole reason for the sudden change that has taken place. I have challenged the hon. Member for Ravensbourne (Mr. Hunt) each time he has reiterated in the House that nothing has been done in dockland. That is grossly untrue. All the evidence is to be seen.
Thousands of jobs have been brought to London through the dockland scheme.

It is patently not true that nothing has been done. It can be seen to be not true. But members of the Government party continue to put forward this idea. I agree with the hon. Gentleman that it took some years to get off the ground. When one recalls that we have had two or three years of Sir Horace Cutler—a trial in anybody's life—we have still made it in spite of him. Left alone, it would have made even greater progress because the momentum exists. It is going, things are happening. Now, superimposed on it, we get this peculiar animal called the urban development corporation, the new quango.
No doubt hon. Members are privy to the story that buying Sir Horace's co-operation on the Jubilee line was on the straightforward option of his becoming chairman of the quango. This is common talk in London. Everyone believes that that is what it is all about. Sir Horace is rather coy and says that he can, of course, play his part in the development of these matters and that he could have his arm twisted. When Sir Horace talks about arm twisting, we know that he is already pretty well down the road. Our suspicion is that this is the deal that is being cooked up. The deal is that in return for the Jubilee line going defunct and being used for the furtherance of the urban development corporation Sir Horace will be offered the chairmanship of the quango. Only time will tell. I am not a betting man, but if I were I should put 5p on this probability at any time. This Bill is typical of what we are getting from the GLC and its associates.
The Minister talked about the need to review and to examine low-cost options. It is important to remember that the Bill was given priority above all other transport plans in London. When my hon. Friend the Member for Lewisham, West (Mr. Price) referred to this, I intervened and mentioned the line from the Elephant and Castle to Camberwell Green and on to Lewisham. That plan was dumped in favour of the Fleet line, as it was then called.
Is it not unfair for those involved to be deprived of a line because of the plans for the Fleet, or Jubilee, line? Lands were bought and areas were earmarked on the basis of the early plans, as this Bill earmarks lands for the Jubilee line.
Let us examine the underground map in a diary. If one takes away the legend "London Transport" and its symbol, one sees that there is very little transport south of the river. The underground lines are all in the north. The Jubilee line is north of the river, and will continue to improve the services in the north. I do not complain of that, but it seems unfair that there is so little of the underground system south of the river. I do not see why that part of London should be refused an improved underground system in order to make way for the Jubilee line.
The Minister has said that there is only a pause. According to the London evening newspapers the pause was to be six months. Sir Horace said it would be six months. The Minister now says that he did not mean that the pause would be six months. However, in County Hall it was believed to be six months. The people from County Hall are here. They say that the delay was believed to be six months.
The Minister may say that four months have already passed, that we need not worry because there is no timetable and that we shall probably consider the matter later. He may say that we should not expect him to canvass options now. He has no options and he knows it. He will not have any options next May because the county will be bankrupt. He knows that, too. There will be no money. Whether the delay is six months, 12 months or two years means nothing, and the Minister knows it.
I am sad about this situation because I have always regarded the Minister as a forthright man. As a Minister he is attractive. I urge him to move away from the unpleasant ways that he is pursuing. The Minister is a nice guy. I urge him to be forthright once again. He should tell the House that he has no intention of building the Jubilee line. However, we want to know what is meant by approving the Bill. It does not matter what his hon. Friend the Member for Streatham (Mr. Shelton) says. The plans will blight the area. It is precisely what this Bill will do. Areas in my constituency have been blighted for years. I wrote to the Secretary of State for the Environment about my famous Graham Road. I spoke of the problems there. That area is blighted because the City of London was allowed to declare Tower Bridge not

safe enough for lorries to pass over. As a result, those lorries go through my constituency.
The Secretary of State wrote to me saying he was terribly sad about that but that he could not intervene between the GLC and Hackney borough council and that this was yet another problem of urban living. It was a problem because his friends in the City of London had so patently fallen down on the job of maintaining Tower Bridge. They suddenly had to close it, they say, in order to keep the lorries off it. When one conjoins that with the fact that the City is closed for lorry parking at night, and that it is closed to lorries over 3½ tons, there is not much left. My constituency, being in juxtaposition, gets all the stuff the City does not want. What right have they to do that? Why cannot they be made to put Tower Bridge in proper order so that lorries can go over it?
The Minister has announced tonight that he has given the go-ahead for the M11 to Hackney Wick, which leads into my constituency. I am grateful to him because it will not reach the North Circular. All that happens is that the lorries come from south of the river. They go through Blackwall Tunnel on to the A106, on to the A102, straight into Hackney and up Graham Road, up Balls Pond Road, up Highgate Hill and out on to the North Circular.
I will tell the hon. Gentleman a story. Recently, in order to familiarise myself with all his plans and objectives, I did a study tour of these roads to which he referred. On our way back from south of the river we came through the Black-wall Tunnel. We were in a coach with three GLC planners up front, and there were Members of Parliament there taking note of the masses of vehicles of all sizes coming along beside us. We went on to the A106 and the A102. Suddenly we were on a six-lane highway with not a soul around us and the GLC planners were sitting there laughing like cats which had got the cream.
I went up to the front of the coach and said "You soppy trio, what are you doing? There they are. All the lorries are going that way through my constituency. We are going along the great highway on our own." These comedians actually thought they had done a lot of good social and highway planning. We were on


our own and all the other vehicles were going somewhere else and through into Graham Road.
I tell the Minister, as he commends the Bill to the House, that there is a real danger of blight and of people suffering badly as a result. We have become quite cynical in London about the assurances given by the GLC and London Transport. In my constituency they decided to build a bus garage. I had many arguments with them about this garage which is right in the middle of a housing estate. I wanted assurances that the buses would not go out of the back door, park round the front of the GLC housing estate, and start their diesel engines at 4.30 in the morning ready to get out on to the routes. I had that assurance. I was told that that would not be done and that the back door was only an emergency exit. Being a simple chap, I was reasonably contented with that and I took those assurances.
Now I see in the local authority minutes a proposal to widen the road at the back of Ash Grove, known as Sheep Lane. I asked myself why they would want to widen that road since it was on a housing estate. I went to the local authority and asked why it was widening it and spending £80,000. I was told it was so that the buses could get out of the back door of the garage. I told the authority of the assurance I had been given that this would not happen. It said "That is all we are being told. We will block that plan for the moment, but the GLC will look at the whole matter again on 30 October".
If I were a gambling man I would bet that the London Transport Executive will try to renege on its agreement. I shall do my best, even if I have to block every Bill that it ever brings before the House, to make sure that it does not park buses along the back of the bus garage and upset my constituents every morning. When I protest about this problem I am told that someone has to have the bus garage. But it is always Hackney. Hackney must have the lorries that come through the city from Folkestone or Southampton. It is no good the Minister giving an assurance that he thinks that this is a good Bill and hoping that in some way the rest of us will follow his

argument, because we do not follow it. We are most concerned.
As I understood it, all the costs of the scheme were examined in great depth. It was argued that the appropriate committees of the GLC had been examining them for two to two and a half years. This Bill was the result and was based on the assumption that the cost would be kept to the lowest level. That was why Sir Horace was so upset when the last Labour Secretary of State for Transport told him that on his viewing of the proposals they were unacceptable.
Where can I obtain a copy of the minutes of the meeting that the Parliamentary Secretary had with Sir Horace at which Sir Horace stated that he had not looked at the proposals and that he was giving a first reaction off the top of his head? He said that he was quite happy and he was sure that he could find alternative cheaper sources. That is precisely what the previous Secretary of State for Transport asked him to do. In rebuttal of that he shouted a lot of abuse, saying that it could not be done.
One of the most significant aspects of the GLC today is that it does not behave like a local authority. Like the Minister's Department and the Department of the Environment, it proceeds by press releases. I have been a Member of Parliament for 15 years, and I recall that previously when Ministers made statements at the Dispatch Box a Member could hear the statement made, study it and go to the Vote Office for papers to familiarise himself with it. He could discover whether the issue affected his constituency and he could talk to the local authorities about it. Those were great days—halcyon days.
Now one has to read it all in the press. Ministers even make statements in press releases during the recess—they do not even have the courtesy to wait for the House to reassemble in order that we may question them. The GLC has developed the system to a fine art. The Government are only learners. Sir Horace has his A-levels in governing by press release. With such a system no one can question the decisions.
The GLC is attempting to transfer houses in London from its ownership to the boroughs. In Hackney we are trying to find out what it is doing. There are


two large estates there which the GLC is threatening to sell. In order to discover which it was proposed to sell I had to get a press release to learn of the plans. No one in the GLC could tell me. The officials there say that they no longer make the policy and that one has to read the local paper or a press release to obtain information. One then returns to them, but they, too, having seen the press release, do not understand it. One is left in an impossible position. I urge the Minister not to accept the Bill. It is not a good Bill and he knows it.
I intervened in the speech of the hon. Member for Streatham merely to ascertain how much he had read of part V, which is headed "Miscellaneous". I felt rather mean afterwards because I was in a position to answer my own question. Clause 21(2) refers to the 1976 Act and is not really a part of the measure before us. That is what I think. However, it is such a dodgy document that I am not sure whether I am right.

Mr. William Shelton: If the hon. Gentleman will resume his seat, I shall be able to answer him in detail.

Mr. Brown: I understand that one or more of my hon. Friends wish to contribute to the debate. As I have said, I may have answered my own question. No doubt the hon. Gentleman will not answer many other questions so he will not have a great deal to cover.
I am dissatisfied with the Bill. I think that we shall come to regard it as something of a disaster for London. It should not be enacted. I may well not oppose it tonight, but I wish to place on record my opinion that it is bad. I do not believe much of what is in it. The Bill will be wrong for dockland. It will harm dockland. I am sad that the Government should interfere with the LTE, and that they have made it impossible for a proper transportation system to operate in the part of London with which we are concerned.

Mr. Ted Graham: It is a great strain to wait for two hours and fifty minutes to be called to contribute to the debate and then have to rush through a speech. I do not intend to deal in full detail with all the matters that

I wanted to bring to the attention of the House.
Edmonton will not be directly affected by the central issue in the Bill, but it is an opportunity for hon Members representing such areas to ask the House to recognise that their constituents, as well as many others who will not be directly affected by the Bill, will be called upon to pay the bill when the GLC, among others, is having to find the wherewithal to put the measure into effect.
The first part of the Bill refers to the duties of the London Transport Executive. The Bill states that:
it is the general duty of the Executive … to exercise and perform their functions … with due regard to efficiency, economy and safety of operation, to provide or secure the provision of such public passenger transport services as best meet the needs for the time being of Greater London".
In my part of London the greatest need lies not with the underground but with the rail from Liverpool Street and with certain bus services. The bane of the lives of many of my constituents is a service called the W8. I am delighted to see in his place the hon. Member for Southgate (Mr. Berry). The hon. Gentleman is not unfamiliar with a great deal of what I have to say about the trials and tribulations of my constituents and his constituents owing to the W8 bus service.
The service is a lifeline. It runs from Edmonton to Enfield and serves, among others, shoppers and those travelling to hospitals and industry. The area is well served by the rail service from Liverpool Street, most of the lines running from north to south. The London Transport Executive will be judged not by grandiose ideas but by how it manages its services.
In terms of value for money the service which the LTE offers my constituents leaves a great deal to be desired. From time to time I write to Mr. Quarmby, the appropriate executive, about the W8 service on behalf of my constituents. I write to him in aggrieved terms asking him to tell me the problems that the Executive faces. During the debate various hon. Members have explained the reasons that I have been given by Mr. Quarmby. He has explained that the buses are out of date, that there are difficulties in servicing them and that there are staff problems. When I make


those reasons known to the people of Enfield and Edmonton, they think that I am living in cloud-cuckoo-land if I believe the excuses given to me by the executive of London Transport.
I went into the office of the local newspaper this morning to obtain one or two headlines. One headline in the Palmers Green and Southgate Gazette reads:
Whatever happened to the 244?
Apparently a whole bus service disappeared at one time. Another headline reads:
Long, long wait for a 107
The bus services in my part of the world need a great deal of improvement.
The people of South London have waited for a very long time for the Fleet line and the Jubilee line. I hope that they will not be deluded by what appears to be the pace and progress mentioned tonight. I hope to return to the subject on a more appropriate occasion, when I have more time in which to speak.

9.50 p.m.

Mr. Ron Leighton: I agree with my hon. Friend the Member for Lewisham, West (Mr. Price), who said that we all had a great interest in London Transport. I certainly have such an interest. Unlike the hon. Member for Streatham (Mr. Shelton), I travel on London Transport. I travel to the House, my home and my constituency on London Transport. I was brought up in a London Transport family. My father was an Underground train driver. His depot was at East Ham, in my constituency.
Before the war we had the best transport system of any capital city in the world. I am not sure that we can say that of our bus service any longer. Where there is a 10-minute service I am told that people wait—as I wait, myself—anything up to an hour, and then the buses come along in a convoy.
I refer to the Jubilee line. There is an unreal situation at present. Sir Horace Cutler thought that the Jubilee line should be made available. The Labour Government stopped him. He met the Minister of Transport. There was a press release, which I read. It was a reticent document. Sir Horace and the Minister have been reticent ever since. The press release said that alternatives

were being considered. We have not heard much about them. It would be churlish of me to criticise someone who was willing to spend hundreds of millions of pounds constructing a railway to Beck-ton. I am in favour of that. I do not know whether the Minister has visited Beckton. Has he seen what are known as the Beckton Alps? In company with my hon. Friend the Member for Newham, South (Mr. Spearing), I went on a tour of the dockland. We saw every available square yard. Let us kill stone dead the notion that nothing has been done. A hell of a lot has been done. For example, £40 million of ratepayers' and public money has been put in. The Beckton marshes have been drained. In fact, the saplings that were planted died as a result of lack of moisture in what were previously marshes. Roads, factories and houses have been built. We were told that we were ready for take-off. However, the local authorities are in perfect understanding with the body that was set up, I believe, by the right hon. and learned Member for Hexham (Mr. Rippon).
The consultative machinery is there. Yet at the stage when those involved are all ready for take-off the Secretary of State says that he will scrap the lot and set up a new quango. That will trample on and destroy local democracy. He says that he will appoint people to run the whole show. If that happens there will be great bitterness in that area on the part of the electors, councillors and officials. They are very bitter at the proposal. They fear, having spent public money in preparing the site, that the Secretary of State for the Environment will move in speculators, cowboys and get-rich-quick merchants, possibly giving them a tax-free holiday and other concessions, to operate on a site prepared with public money. If he does that there will be grave consequences.
As a new Member, I shall watch what happens and I shall learn how parliamentary democracy is run. The Minister may not be sitting on the Government Front Bench for ever. If it is done by dictatorial methods, trampling on local democracy, perhaps that will set a precedent for the future.

9.55 p.m.

Mr. William Shelton: In the few minutes remaining I shall try to answer one or two questions.
The hon. Member for Hackney, South and Shoreditch (Mr. Brown) has to some extent answered his own question. His unwitting confusion led to some confusion in my mind. His question as to how this would lead to expenditure as a result of the Jubilee line is nonsense, because clause 21 has nothing at all to do with the Jubilee line. It has to do with the famous Runcorn clause—he must have missed it in the course of my opening remarks—which relates to Gloucester Road and Surrey Docks in the context of the 1976 Bill. Indeed, I did not think much of his speech. A good deal of his speech—and of that of the hon. Member for Lewisham, West (Mr. Price)—seemed to underline their suspicions of Sir Horace Cutler as some kind of ogre. They seemed to have some kind of conspiracy theory, whether it has to do with the Olympics or with some deal. Their remarks served only to raise Sir Horace still higher in my esteem. I am delighted that he is imposing his presence not only on London government but on Labour Members. May he continue to do so for many more years.
The hon. Member for Newham, South (Mr. Spearing) asked about the link with the British Rail line at Woolwich Arsenal. This would be extremely expensive but it would not be impossible. It would create some difficulties in extending the line at a later date to Thames-mead. However, the matter is not decided. His representations will have been listened to by London Transport, and I shall make sure that they are noted by the appropriate quarter.
The hon. Member also urged—I am with him in this—that the line to Beckton

should be concluded as speedily as possible. It cannot be done in isolation and must depend on the rest of the line. I hope, with him, that we shall not have to wait too long.
The hon. Member for Lewisham, West talked about the vast sum of £225 million. I remind the House, in context, that the GLC annually spends £240 million on its transport programme and that London Transport has a capital programme of about £100 million annually. The figure for the Jubilee line of about £225 million would be spread over a great number of years, say 10 years, in which case we would be talking of about £20 million annually. In context it is not so much.
The hon. Member for Lewisham, West mentioned the lack of a line through his constituency. That applies to my constituency. Except for one brief reference, he did not mention the problems of dockland. I urge on him that he should think of the Jubilee line in the context of dockland and the difficulties of dockland.
I am grateful to the House for the kind reception, on the whole, given to the Bill. I am grateful for the kind words of the hon. Member for Kingston upon Hull, East (Mr. Prescott) and for his, on the whole, not ungrudging acceptance of the Bill, Finally, I am most grateful to my hon. Friend the Minister for the welcome that the Government have given to the Bill, which I commend to the House.

Question put and agreed to.

Bill accordingly read a Second time and committed.

UNIVERSITY COLLEGE LONDON BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday.

Orders of the Day — EUROPEAN COMMUNITY (STEEL INDUSTRY)

10.2 p.m.

The Minister of State, Department of Industry (Mr. Adam Butler): I beg to move,
That this House takes note of EEC Document No. 4627/79 and of the Department of Industry's memoranda dated 20 July 1979 and 18 October 1979 on State Aids for the Steel Industry.
It is some nine months since the House last debated the European Commission's proposals on the control of State aids for the steel industry. Since then, as the House knows, prospects for the steel industry have not improved and the long looked for major upturn in demand has not taken place. The British Steel Corporation, in common with the rest of the European steel industry—

Mr. David Watkins: On a point of order, Mr. Deputy Speaker. There seem to be a number of conversations going on around the Chamber, and those of us who are anxious to hear the Minister are having some difficulty.

Mr. Deputy Speaker (Mr. Bernard Weatherill): That is a legitimate point of order. Will hon. Members who wish to leave the Chamber kindly do so quietly?

Mr. Butler: I was saying that we have not debated this matter for nine months and that since then the prospects for the steel industry had not improved. Indeed, the British Steel Corporation, in common with the rest of the European steel industry, is still not generating the funds needed to make an adequate return to the taxpayer for the massive investment which has to be made in the business and to justify a continuing high level of expenditure.
Furthermore, unless the corporation ensures that it is viable and competitive, it can neither rebuild its home market

share nor secure vital export orders. The Government have made it very clear to the House on a number of occasions that we are determined that viability should be restored as quickly as possible and we look to management to achieve the targets that they were set, both by the previous Administration and by this Government.
Steel is an international business, and it is now clear that we cannot proceed in isolation from what is happening in the rest of the world, and, in particular, other parts of the European Community. The House has frequently paid tribute to the anti-crisis measures introduced under the guidance of Commissioner Davignon. I accept the need for them, if temporarily, because I am a firm believer in the free market philosophy. But I remind the House that these measures were not intended to provide a permanent cushion of protectionism. They were designed as part of a wider plan to tackle the problems of the European steel industry. They were conceived to create a breathing space while steel undertakings could carry through their own restructuring plans consistent with Community general objectives. I believe that those crisis measure were welcomed by the corporation, private producers and, indeed, the unions.
If this restructuring does not take place, the stronger steel producers will refuse to renew the measures and we shall lose the opportunity for orderly change in our own industry. I do not believe that that is an empty threat, as Ministers who were previously involved in negotiations on steel matters within the Community will readily recognise.
We in the United Kingdom have come a long way down the restructuring path and are well ahead of most other European countries. The previous Administration published a White Paper and endorsed moves in this direction, though it seems to me that when the going became tough they did not stick to their last, or follow the logic of their own arguments. Even so, I must remind the House that in the last two years 5 million tonnes of steel-making capacity has been eliminated, with the loss of about 15,000 jobs which, if we add the losses in British Steel Corporation product mills at the


finishing end of the business, amounts to some 24,000 jobs.
Among the closures that were accepted under the previous Administration were operations at Hartlepool, East Moors, Ebbw Vale and a number of others. It is a long list and there is no rejoicing about that. I believe that I am stating a fact when I say that it was under the Labour Government that the Corporation announced its proposal to discuss with the TUC committee the future of iron and steel making at Corby.
The British Steel Corporation's current production capability of some 22½ million liquid tonnes a year compares with an actual output of over 26 million tonnes in 1971. In the last decade no other European country has actually reduced capacity and output by as much as we have. Indeed, some countries have expanded their capacity. Despite the low level of demand that has prevailed since late 1974, other member States still seem to be thinking about how they should respond to present problems. That is not a healthy situation.
It is because of this lack of positive action throughout the rest of the Community that the Commission has proposed the decision which we are debating, in its latest form, tonight. Throughout Europe, capacity utilisation is, on average, just under 70 per cent. Under-utilisation of capacity has been exacerbated by the coming on stream of large plants in this country and elsewhere, because construction was well in hand before the depression in the steel market.
The Commission, after consultation with the member States last year, set general objectives for the European steel industry. It sees the State-aids decision as a means of preventing member States from using aids in a manner which could stand in the way of such Community objections.

Dr. Jeremy Bray: The Minister is quoting figures about crude capacity in Europe by comparison with this country. Is it not misleading to quote the total figures? Surely what is more important is the wholly modern capacity in BOS steelmaking, where we have a very much better record than other European countries in terms of the modernity of our own capacity?

What is really needed is the scrapping of a lot of obsolete capacity in Europe.

Mr. Butler: I do not think I disagree with the hon. Gentleman. I was using the figures to demonstrate that there is considerable over-capacity at present. We know our own position and we believe that there is capacity which ought to be scrapped within the Community. But it is one of the considerations which the BSC has in hand at the moment in considering what it should do with its surplus capacity.
If this decision is not accepted by the Community, the restructuring that is necessary, and the need for which the hon. Gentleman has just underlined, will persist in a slow and haphazard fashion if it proceeds at all. I hope that the Opposition will give the Government their support tonight in taking note of the decision. They should do. Last January, when in Government, they asked the House to "take note" but made clear many reservations about the decision as it then stood, and the Conservatives agreed with them on quite a number of points. They expressed considerable doubts and reservations.
I hope that tonight the Opposition need have no doubts and reservations, because the decision we have finally negotiated is, in our view, acceptable. In the past, the United Kingdom has resisted the State-aids proposals on the grounds that these would effectively give the Commission overall control of the BSC's investment plans and the annual operating plan. In that event, the BSC would have been denied the capability of restructuring in the way it thought best, and would have been denied the capability of negotiating closures at its own discretion and in consultation with the TUC steel committee and local work forces. That passage repeats almost word for word what was said from this Dispatch Box last January.
This is no longer the case with the decision now before the House. In response to the United Kingdom's insistence that we retain the right to control the pace and size of our restructuring, the Commission has substantially modified its proposals. The present decision is materially different from the one debated in January.
Member States are now required only to seek clearance of specific aids, which, being aids under a Community scheme, are to be regarded as Community aids. Investment on a commercial basis, including advances of working capital to the BSC, no longer requires prior notification and clearance, although the Commission retains the right to make inquiries about advances which come to its attention in order to see that the decision is being observed.
Specific aids granted by member States to the steel industry are contrary to article 4(c) of the Treaty of Paris—this was very much a stumbling block previously—and in so far as the decision empowers the Commission to block such aids it is no more than a procedure for enforcing the existing provisions of the treaty.
This brings me to the legal questions which have been raised about the Commission's earlier proposals. As originally drafted, the decision was objectionable on legal grounds. This was, first, because it could have had the effect of altering the existing balance of power between the Community institutions. As amended, EEC document 4627/79 now proposes that any action by the Commission to enforce the decision must be taken through article 88 of the European Coal and Steel Community Treaty. That, combined with the deletion of the provision that previously gave the Commission power to require repayment of any aid of which it did not approve, means that the existing balance of power between the Community institutions is effectively unaltered.
Secondly, earlier drafts of the decision purported to authorise as lawful those aids which, by virtue of article 4 of the ECSC treaty, are recognised as incompatible with the Common Market for coal and steel and accordingly are prohibited within the Common Market. The document before us is so drafted that it authorises only what it calls "Community aids".
The Commission's lawyers have argued strongly that such Community aids are not covered by the prohibition imposed by article 4, and that argument has been accepted by the other member States. I am advised that, although that argument could rightly be challenged, there is no

authority to prove that it is wrong. It is acceptable as a ground for our consent to the decision but only on a strictly temporary basis. The House knows that the decision runs only until 31 December 1981, and I have made it clear to the Council that any renewal or extension of it would necessitate proceeding by way of Treaty amendment.
There is a further important difference between the text that the House debated on 25 January 1979 and the document before us. The former required prior notification to the Commission of aids and interventions in favour of the steel industry. These included regional and general aids and capital advances to publicly owned undertakings. It also gave the Commission power to approve such aids and, by means of a decision addressed to a member State, to require the repayment or other withdrawal of such an aid. The combined effect of these provisions would have been to detract from the powers previously enjoyed by member States to finance their steel industries, and would thus have materially altered the balance of power between the Community institutions. These arguments were presented with some force during that debate.
The present text deals only with specific aids to the steel industry, and not with general or regional aids which benefit the industry and which fall within the scope of article 67 of the ECSC Treaty or articles 92 and 93 of the EEC Treaty. Arrangements are being finalised for the notification to the Commission of general and regional aids for steel, but without accepting any extension of the Commission's existing powers under the Treaties.
The present decision, which was a late introduction but supported by us, says at article 1(3) that any risk capital contributed according to standard company practice in a market economy is not an aid at all and as such not subject to control. The Government are reinforced in their intention not to notify advances they make under section 18(1) of the Iron and Steel Act 1975 on the basis described in the White Paper "British Steel Corporation: the Road to Viability". As hon. Members will know, section 18 is currently the sole vehicle for Government advances of capital to the BSC.
As I have said, other member States have accepted the argument that the Community aids postulated by that decision are not contrary to article 4 of the Treaty of Paris. Similar decisions in favour of the coal industry have been adopted on previous occasions and have enjoyed the support of many hon. Members. These decisions have sought to legalise aid for coal production by member States on the basis that that was subject to a Community regime. Discussions are taking place on amendments to the coal decision, and plainly whatever the House decides tonight on the steel aids proposals will have a bearing on our attitude on coal aids.
In the light of the safeguards that have been introduced into the decision, the acceptance of previous coal aids decisions, the need for the Community to adopt a common discipline as regards steel and the importance of achieving successors to the present Davignon measures, the Government have indicated their willingness in principle to give assent to the decision. I have made it clear that the legal position is not as satisfactory as we would wish. Nevertheless, the Government are satisfied that the legal considerations are not such as to preclude us from playing our part in the wider Community effort to tackle effectively the problems of the steel industry. These problems remain considerable, and on this account I ask the House to support the motion.

10.21 p.m.

Dr. John Cunningham: I thank the Government for providing time so early after the recess to debate this document as well as the even wider issues of steel policy, which some hon. Members may wish to raise. I also thank the Minister for the careful way in which he introduced the document. This is a complicated situation and he has gone some way towards clarifying it. However, there are still a number of questions I wish to put to him.
The Minister began by saying that we had gone further than any other country in the EEC in restructuring steel. Most hon. Members on this side would agree with that, and some would say that perhaps we have gone too far, given the circumstances in other countries, and the peculiar and very difficult social circumstances with which we are faced in many

regions where unemployment is high and industries associated with steel are in great difficulty. The Minister was careful not to say that the Government intended to go no further in running down the capacity of British Steel and that concerns the first question that I put to him. Would it not be justifiable for the Government to tell our EEC partners that we have already suffered a great many closures, with all the social economic and political consequences, and we do not intend to go any further, bearing in mind the point that has been made about the well-established fact that much of the capacity that exists in other EEC countries is grossly inferior to our steel making capacity? Therefore, on political and economic grounds, and in view of the inefficiency of the European steel industry, the Government would be justified in taking that stand and we urge them to do so.
The last Labour Government clearly stated their views on these matters. The Minister has urged us to agree to this document tonight. We shall agree with what he has said in the context of the document if we can have some assurance of Government support for British Steel.
The view that we took when we were in office—and it remains our view today—was set out in the memorandum of 19 February, which my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) introduced. In that memorandum we said that we did not have specific aids for steel in the United Kingdom. We do not regard our regional policies as being specific aids in any way. Thus, the second assurance that I seek is whether we shall make it clear to the Commission that in no circumstances will our regional policy measures in the United Kingdom be regarded as being covered by the provisions of this document. Certainly they are not specific to steel. However, they make a major contribution to British Steel because of the nature and location of steel plants in development and special development areas. As the House well knows, the provisions have much wider implications for our regional policy and it would be intolerable for the Commission to try to control that aspect of our regional policy. We should like a categorical assurance that the Government will not accede to any such request or attempt on behalf of the Commission.
The Minister of State said clearly that he believed that the document left totally in the hands of the Government the ability to control the financing and development of British Steel. We welcome that important provision. There are problems in Britain and Europe in the steel industry, but we could not accept, in any circumstances, that decisions about capacity, investment and how we finance our industry should pass in even small measure to the EEC, particularly in view of my earlier remarks and what the Minister said about the situation elsewhere in Europe.
The Minister said that the Labour Government strongly supported the Davignon measures. It was ironical to hear him say that he was in favour of a free market economy in the same breath as welcoming what the measures had done for the steel industry. It is difficult to maintain that in the context of Europe intervention is welcomed but that in the context of our domestic economy it is not. That is trying to ride two horses at the same time.

Mr. Adam Butler: I should not like to be misunderstood on the matter. I made clear that we support the Davignon proposals at this time because they provide a breathing space. The Government are trying to get the British Steel Corporation into a state where it can compete without any form of protection or subsidy. That is the objective.

Dr. Cunningham: We understand well what the Government are trying to do. What we are saying is that it is unrealistic to suppose that they will do that in the foreseeable future without considerable assistance being provided for the steel industry and, indeed, other industries. As ever, the proof of the pudding will be in the eating and we shall see how successful or otherwise the Government are in the matter. We believe that not only will they not be successful but that they risk doing much damage to the steel industry and the many large communities that are so heavily dependent upon the industry for employment opportunities. I refer to areas where unemployment is already unacceptably high.
I turn to a consideration of the documents in more detail. I hope that I am

not alone in admitting that I always have to spend at least 50 per cent. of the time before these debates finding my way around the various documents and the other 50 per cent. of the time trying to understand them. I shall refer to document 4627/79 of 19 February 1979 and document 4627/79 of 20 July 1979. Those are the documents associated with this decision that were issued by the previous Labour Administration and the present Government.
There are differences, which may or may not be important, under the heading " Impact on United Kingdom Law"—paragraph 3 of the first document and paragraph 6 of the second. The second document refers to enlarging opportunities for the United Kingdom Government to give aid to the steel industry. What do the Government mean by that? We hope that they will take advantage of any such opportunities. If they exist as a result of the decision, will the Government take advantage of them?
That may be of interest in other ways. Does it relate to indirect aid? We all know about the disparities in the Community in coking coal subsidies. Shall we have the opportunity to give aid for coking coal? Germany gives much greater assistance in that way to its coal industry and thus indirectly to its steel industry.
There also appears to be a major difference under the heading "Policy implications"—paragraph 5 in the first document and paragraph 8 in the second. I hope that we may be reassured that our fears are unfounded. The Labour Government's document insisted that there was no legal basis for the action proposed by the Commission. It said:
The proposal to apply Articles 92 and 93 of the Treaty of Rome to regional aids for steel has no sound legal basis in the light of Article 232 of that Treaty.
That conclusion was not reached lightly by the previous Government. It was a categoric statement. We suggested that the proposal was ultra vires the powers of the Commission, which had no authority to proceed in that way.
The present Government's memorandum says something different and I should like the Minister who is to reply to explain why. The Minister of State touched on the matter and referred at


some length to a written answer that he gave yesterday, in which he said:
The decision as originally drafted was objectionable on legal grounds, firstly because it could have had the effect of altering the existing balance of power between institutions of the Community and member States.
That implies a de facto amendment of the Treaty. The Minister continued—and this is curious:
The Commission's lawyers have argued strongly that such Community aids are not covered by the prohibition covered by article 4, and this argument has been accepted by the majority of member States.
I infer from that that at least we have not accepted the argument. It does not make it clear whether we are alone in this regard. The Minister's answer goes on:
I am advised that, although this argument could rightly be challenged, there is no authority to prove it wrong".
Of course not, because it has not yet been challenged. That is a fairly obvious statement. Presumably there could be no authority unless we challenged it in the court. But since apparently there is a strong case for saying that there is no authority to proceed in this way, we would be grateful to learn what has changed. What is the opinion of the present Attorney-General? Perhaps we could be told about that.
The Minister of State argued in the final part of his answer yesterday:
it is acceptable as a basis for our consent … but only on a strictly temporary basis and have made clear to the Council that any renewal or extension of the decision would necessitate proceeding by way of treaty amendment".—[Official Report, 22 October 1979; Vol. 972, c. 14–15.]
If that is the feeling now, why agree to it? Why take the risk? The risk is that if we agree to it now, because it is a pro tem agreement, it will become a de facto situation and we shall have lost the argument. That seems to me to be a very real danger, and we need to be convinced that that is not a serious risk that we are running.
If that were the situation, there would be no going back. We should have comprehensively sold the pass on this matter and we should then possibly be in some difficulty. Therefore, we should like greater clarification of that point. This is a major question and I make no apology for going into it at some length. The House is certainly not in a position

tonight to agree to anything resembling a de facto change in the Treaties. That is why I have spent so much time dealing with this point.
We want to be assured that our regional policies, particularly regional development grants, which are of such importance to steel, are not jeopardised, that our ability to control, finance and determine the size of our own industry remains within our own control and that we are not agreeing tacitly or implicitly to the changes to which I have just referred. I hope that when the Under-Secretary replies he will be able to give us assurances on those matters.

10.38 p.m.

Mr. John H. Osborn: It is almost ironic that I should have spoken for the Conservative group in the European Parliament for so many years about the British steel industry and its position vis-a-vis the European steel industry, and have urged time and again the need for a plan such as the Davignon plan and the proposals that we are now debating relating to State aids for the steel industry.
There has always been a suggestion in the European Parliament that meetings within an industry—in this case the steel industry of Europe, often through the auspices of Eurofer—could go against the policy of promoting competition. Indeed, in the European Parliament I have kept a wary eye on Commissioner Vouel, who is in charge of DG4 and competition policy, and who has maintained a brief to ensure that Commissioner Davignon does not provide an umbrella for steel cartels. It has come out in debates in the European Parliament that there should be no brief for Commissioner Davignon to provide such an umbrella, but on the other hand it is better for competitors and their Governments to come together under Commissioner Davignon to restructure the steel industry than to unleash a free-for-all at this time.
We are debating the draft decision of 1 February which has been prepared by the Commission and is to be considered by the Council of Ministers in the near future. There is also the attitude of the Government to the outcome of this debate, bearing in mind that an earlier debate took place last January. These are


issues that we should want to examine carefully.
The hon. Member for Whitehaven (Dr. Cunningham), speaking for the Opposition—I am aware of his knowledge of the subject—has talked about British regional aid. The hon. Gentleman said that regional policy should be in our own control. That is fine when talking about the steel industry at the present time. For many years I was on the Regional Policy and Regional Planning (Transport) Committee of the European Parliament. Lord Thomson was the Commissioner for regional development. No one considering his proposals would have suggested they were purely British for the British. This regional committee of the European Parliament has tried throughout to look at development in a European context. We have been talking in this House about the fact—certainly yesterday if not today—that there has been a deficit, or will be a deficit which Britain will have to meet on the budget of £1,000 million. This may be due to the drain of the common agricultural policy. But let us have no illusions. The Community regional policy has been of benefit to Britain, particularly its regions.

Dr. John Cunningham: I do not want the hon. Gentleman to be in any doubt about the Opposition's view on this matter. We welcome regional aid from the EEC, but the hon. Gentleman has to acknowledge that it is trivial in comparison with the impact of our own regional policy. In no sense could we accept that the latter should be put at risk because of some vague promise from the former that has yet to materialise.

Mr. Osborn: I am interested to hear that statement put forward at this time. Many years have gone by since we advocated this programme. The Minister of State went on to claim progress in the restructuring of the steel industry. He has even said that restructuring in Britain has gone ahead of the rest of the Community. His predecessor might have said exactly the same. If we have gone ahead with our restructuring, this is to be welcomed. But there are other issues of concern to us. It is ironic that The Star

in Sheffield this weekend had the headline
City steel forge to axe 93 jobs.
Tonight in this debate we are tending to concentrate our minds on the British Steel Corporation.
Sheffield may be renowned for its steel, cutlery and engineering industries, but there are many ancillary industries, including the iron and steel foundry industry and the refractory industry, in my city. To resolve fair and unfair competition, say, between the British Steel Corporation and the private sector of the steel and foundry industries has always been difficult for us to do in this country alone. When the British Steel Corporation continues to make substantial losses, even if less than those reported in the accounts of 1978–79 of some £450 million, its main competitors, whether in the private sector of the British industry or based on other EEC countries, will inevitably question Government aid given to the State industry and whether the previous Government, let alone the current Conservative Government, have given an unfair advantage to their own State industry.
I raise this matter because the latest industry to question the British Steel Corporation is the refractory industry. It is represented by its trade association, the National Federation of Clay Industries. The industry has companies throughout the United Kingdom.
One reason why the steel industry was established in Sheffield was the presence not only of iron ore, coal and the original water power but of the limestone, and, of course, the raw materials which are essential to provide the refractories. The industry has a turnover of about £200 million a year and exports £50 million worth of goods. This British industry, let alone its competitors in the EEC, is concerned that the refractories division of BSC is using its position to add to BSC losses while undercutting prices at home and abroad.
The biggest single customer of the British refractory industry is BSC, which is almost a monopoly purchaser. It is under pressure to use the products of its own refractory division.
The Secretary of State will receive a dossier about this matter from the private


sector of the refractory industry. In the context of State aid to the steel industry we should move cautiously in the House. However, I understand that the Community refractory industry is equally anxious about this aspect of competition, even if this concern moves out of the basic steel industry.
I urge the Minister to explain what procedures exist for examining such complaints and what options are open to the Secretary of State for Industry. Will Commissioner Davignon be able to hear complaints from the European refractory industry, which shortly is to charge the refractory division of BSC with overseas dumping?
It might be said that I am attacking BSC again. I am not. If one big industry is in an advantageous position, country-wide concern is caused, not only to its competitors in an ancillary industry, such as the refractory industry, at home, but overseas, too.
It is essential that an understanding between the various aspects of the private sector and the BSC exist not only in Britain but throughout the Community if we are to benefit from a large scale restructuring of the industry. Some companies believe that the British Steel Corporation has received the largest benefit from aid. We must be certain that the Minister will consider the steel industry, and its ancillary industries as a whole when weighing up their plight in competition with Community companies.
I welcome the Commission's decision to examine some of the issues raised in the January debate. I hope that the Minister will reach a successful compromise and ensure that we discuss Britain's steel industry in the context of the dilemmas facing the steel industry in the Community. Members of Parliament from Germany, France and Italy are equally anxious that employment be safeguarded in cities where there are steel plants. We should take note of that in the House.

10.49 p.m.

Mr. Stan Crowther: I thank the Government for making time available for this debate. It would have been disgraceful if we had not had an opportunity to debate this matter again, in view of the decision made by the House in the last Parliament. It would have been even more courteous if the

Government had allowed us to debate the revised document before they committed the country to accepting it.
I am not as sanguine as my hon. Friend the Member for Whitehaven (Dr. Cunningham) and the Minister appear to be. The document ties us hand and foot to the Commission. There have been a few changes since we last discussed the matter, but they seem to be of a minor nature. The fundamental principle remains unchanged. We are told that certain aids to the steel industry will be allowed. But the real catch is in the third part of article 2, which tells us that these aids in support of investment
may be"—
note that it is only "may be"—
considered compatible with the orderly functioning of the Common Market
in certain circumstances which are outlined, but—and it is a big but—only if the investment programme itself
conforms to the general criteria for the restructuring of the steel industry
elaborated by the Commission. So at that point, anything which is related to an investment programme that does not conform to the criteria elaborated by the Commission is out under this document. I look forward to hearing the Minister's reply to the question put to him on this very point by one of my hon. Friends. The word "restructuring" is a euphemism for closure. It is the modern habit to use slightly more pleasant terms for very unpleasant events.
I heard Conservative Members say many times in the last Parliament when we debated steel that we no longer really had a British steel industry, only a European steel industry. I always found that sad and upsetting. Although that doctrine is repugnant to a great many people, it is clearly now being implemented. The document now before us spells that out very clearly. It brings home the extent to which Britain has ceased to be independent. It may be that this handing over of sovereignty, this sacrifice of the right to make our own decisions about a vitally important industry, would be more acceptable if any good had ever come of our membership of the EEC. However, British membership of the Common Market has been nothing short of catastrophic for many British industries, as it has for the British public.
I accept that we shall not come out of the EEC, at least during the lifetime of this Government, but perhaps even in the Community a little more backbone in our dealings with the EEC or a little more Gaullism, a little more attention to the national interest, might not be a bad thing. It seems that the French, the Germans and the Italians are able to break the rules with impunity whenever it suits their purpose to do so. No doubt it is because we play cricket that we always observe the rules.
The steel industry, especially the private sector, has been severely hit by imports of special steels from EEC countries, particularly Germany, at prices which seem to come very close to dumping, except, of course, that within the EEC there is no such thing as dumping. There is no possibility of carrying out proper investigations by looking at invoices, and so on, to see whether producers are dumping.
The process plant industry, which is a major customer of the steel industry, has been put in serious danger—this cannot be over-emphasised—by foreign competitors, especially those in Italy. They have been gaining contracts for work in Britain, often in development areas where the taxpayers are putting in substantial sums, by submitting tenders that lead us only to the conclusion that they are subsidised. Various firms, including one in my constituency, have quoted examples where tenders submitted by foreign firms, especially Italian firms, do little more than meet the cost of materials. Clearly somebody is breaking the rules, but it seems that once we are in the EEC there is no means of investigation.
I do not imagine that the Government will have the guts to take us out of the EEC or to hold another referendum, but it is time that we started showing some teeth. The Prime Minister has recently been making appropriate noises about the scandal of the budget contribution, but I do not believe that the right hon. Lady will do anything when our so-called partners tell her to go and jump in the lake. She made it clear as recently as this afternoon that she had no sanctions in mind to back up her brave words.
I fear that we shall continue to face grave difficulties. The document, small

in its scope within the totality of EEC arrangements and operations, although important to the steel industry, seems to symbolise the loss of our right to make decisions on matters that are vital to British industry. The British lion has become a puppy dog begging to lick the hands of its masters in Brussels. It is a sad spectacle. It is one that my constituents and I view with concern.
The British steel industry gains nothing from membership of the EEC. It does not need the EEC. It is capable of standing on its own feet if it is given the right support inside Britain. It faces immense problems, and so does every other steel industry in the world. However, we have ample proof that British steel workers, given the right level of investment, good management and the right support from the Government, can beat competition from anywhere in the world. There is proof of that in the Rotherham works, where my constituents and those of my hon. Friend the Member for Rother Valley (Mr. Hardy) have shown that they can lick the pants off the Japanese, the Germans or anybody else if they are able to compete on equal terms. All that they need is a decent opportunity.
I fear that the document will hamstring the necessary development of the industry. I am glad that capacity level has been mentioned. I look forward to hearing the Minister's reply. We are running into grave dangers by tying ourselves still further to the EEC Commission.

10.58 p.m.

Mr. Michael Brown: I feel that I am in a unique position. I had the honour of serving my hon. Friend the Under-Secretary of State as a research assistant for a period in the previous Parliament. On some occasions he accepted the suggestions and work that I brought before him. I sincerely hope that he will be able to listen and respond favourably to some of my remarks.
I shall take up a number of the matters raised by the hon. Member for Rotherham (Mr. Crowther). The hon. Gentleman referred appropriately to Gaullism, which adequately sums up the position that we should be taking.
I approach these matters in a slightly different manner from the hon. Member for Whitehaven (Dr. Cunningham). To some extent I turn the document round the other way. I accept the need for


Britain to take note of the document, but I suggest that we should loudly be saying to other EEC countries that they should take note of it, and that perhaps they have even greater cause to do so.
The hon. Member for Whitehaven mentioned an item which should be given greater attention in the House this evening. He referred to coking coal subsidy, in particular in relation to West Germany. This causes considerable problems with regard to British Steel Corporation management. In Scunthorpe, in my constituency, strenuous representations have been made to me. The Minister of State, who very kindly visited my constituency last month, will confirm the tremendous representations which were made to the effect that the steel industry in this country is very happy to do everything it can to meet the Secretary of State's requirement, but that it is having great difficulty in doing so when there is such great import penetration from countries such as West Germany. Part of the reason for this is the indirect aid to the steel industry in other EEC countries, which seems to have escaped the attention of the EEC document.
I tabled several written questions to my hon. Friend the Secretary of State for Trade before the Summer Recess. In one of them I asked whether he was
satisfied with the powers available to him to prevent the dumping of steel from other EEC countries".
As has been pointed out, there is a great problem in the EEC in deciding what is meant by dumping. The answer that I received was:
The concept of anti-dumping action between member States is not compatible with the fundamental principle of free circulation of goods in a unified market".[Official Report, 10 July 1979, Vol. 970, c. 164.]
I agree with that entirely. Our difficulty is in trying to identify dumping. I feel sure—and in saying this I believe I have the support of other hon. Members who represent steel constituencies—that there is dumping within the EEC. We cannot call it dumping because that is against the EEC terminology, but that is what it is, for want of a better word.
I also tabled some questions to ascertain the level of import penetration from other steel-producing countries in the EEC in the form of rods and bars. I was

horrified at the information I received, relating to the period from April 1978 to March 1979. The figures relate to the percentage of rods and bars by weight. The figure from Italy is 10·53 per cent., from France 9·87 per cent., from the Federal Republic of Germany 9·16 per cent., from the Netherlands 6·50 per cent., and from Belgium and Luxembourg 1·63 per cent. They add up to a horrifying total import penetration of 37·79 per cent. That can only be because unfair aids are being given by other member State Governments to their steel industries. The coking coal in West Germany is a particular example about which we should take some action in the Commission.
Will the Government please bring some influence to bear on other member States in regard to these peculiar indirect aids? We cannot identify them, but we know that they exist. Heaven knows the position that we could be in if we were able to subsidise our coking coal. I am not suggesting that it would be right for the United Kingdom to subsidise coal for the BSC. I am suggesting that perhaps the BSC should have the fredom to purchase coal on the open market from the cheapest available source in any part of the world. That could well take the BSC to a market beyond the EEC, much further into the southern hemisphere.
It is very important for the two sides in the debate to draw some common thread from it. That common thread should be for the Government to use very strong endeavours and to suggest to other member States that if they are to take note of the document, as our Parliament is being asked to do, there should be some sanction imposed on other member States if they continue to persist in what I would only describe as unfair competition which is clearly causing tremendous problems for the BSC in achieving the requirement set down by the Secretary of State. It is a requirement which I support and I sincerely hope that it will be achieved by the BSC. It will be difficult to meet in the light of answers of the sort that I have received, and when other countries are able with impunity to continue taking the sort of action I have described.
My message to the Under-Secretary of State and to the Minister of State is that I sincerely hope that, in agreeing to this document and through our representation on the Commission, we shall be able to


use some sanction on other member countries also to honour the document.

11.6 p.m.

Mr. Bill Homewood: It is obvious from the speech made by the hon. Member for Brigg and Scunthorpe (Mr. Brown) that he comes from a steel, not a coal, constituency. Otherwise, some of his comments would not have gone down very well.
I understand that we on the Opposition Benches will not push this motion to a Division. I am not unhappy about that state of affairs. Had it been otherwise, I should have been in an awkward dilemma between my abhorrence of the Common Market, stated so succinctly by my hon. Friend the Member for Rotherham (Mr. Crowther,) and my conviction that the British Steel Corporation's intention to close the Corby iron and steel works is an act of stupidity bordering on criminality. The reason will become clear as I move through what I want to say.
In addition, I do not believe that the communities which are being savaged by steel closures will imagine that justice is being done to their position by a three-hour debate on an EEC decision at this time of night. Many of them will not understand and will wonder why the Government are not prepared to allocate time for a full debate on the steel industry when a new town, such as Corby, stands on the verge of disaster.
I understand, Mr. Deputy Speaker, that I have to address myself to the decision or, as it has been put tonight, at least wait until you shift uneasily in your chair and then refer to it.
I contend that article 4, indents 1 and 2, is of particular interest:
Aids to facilitate the continued operation of certain undertakings or plants may be considered compatible with the orderly functioning of the Common Market if they meet the following criteria:
they form an integral part of a restructuring programme designed to assist the undertaking or plant in question to become competitive and able to operate without aid, the said restructuring programme taking into account the general criteria for the restructuring of the steel industry referred to in Article 2, third indent"—
that is the EEC steel industry—
they are of limited duration or are progressively reduced at a sufficient rate for them to be eliminated within a reasonable

period having, regard to the restructuring programme undertaken".
It is my belief that compliance with these undertakings would write off not only the whole of the British Steel Corporation or the British steel industry but most of the European steel industry to boot. That is because, in the present situation, and with the forecasts that we are facing recession in industrial activity throughout the world, there is no way in which any steel industry in Europe or anywhere else will be able to meet those criteria within the "reasonable period" referred to in the document.
First, we must look at what is meant by the term
competitive and able to operate without aid".
Usually the word "competitive" relates to prices, or quality or customer service, but in this instance it has no relationship to any of those things. It relates to the ability of the Community's steel industries to sell their product in sufficient quantities and at prices that eliminate their present enormous losses.
I was interested to hear that the Davignon plan was an exercise in competitiveness. In fact, it is the creation of probably one of the largest manufacturing cartels in the world, not as significant as OPEC, but then it exists for the opposite reason. It exists to prop up low demand rather than to control high demand.
In the year ended 31 March 1979, the BSC lost £304 million, so one assumes that "competitive" in its case means that when it breaks even it meets the EEC criteria, and, of course, the corporation is committed to this Government to break even at the end of its current financial year, ending 31 March 1980. That is an exercise in fantasy that even Dr. Who will never emulate.
The simple fact is that the BSC's strategy is geared to the existence of five large coastal plants, with an estimated capacity when fully on stream—and when they are not fully on stream but are commissioned they cost more money—of 25 million to 26 million tonnes of liquid steel. Last year, the corporation produced 17·4 million tonnes, and this year the current estimate is between 14 million and 15 million tonnes. Yet, to break even, all of the five large plants have to operate at about 80 per cent. capacity,


that is to say, 19 million to 20 million tonnes.
The 10-year plan of the BSC, with its requirement of 35 million tonnes by the mid-1980s, appears to have been a colossal blunder. I say "appears to have been" because I think that experience in all cases has shown recently that periods occur when history proves to be a doubtful asset in forecasting future trends.
I am not critical of the error. I am aware that the trade unions at the time were arguing for an even larger capacity to be created. Who knows but that either the BSC or the unions will not look so wrong in five years' time as they appear today? For we have a number of instances where an apparent over-estimate of supply has been corrected only for us to find that acute shortages occur because of a change in the economic atmosphere.
It is my belief that only one publicly owned steel undertaking in this country could have the provisions of articles 4 and 5 of this decision applied to it without qualms, and that is an undertaking that the BSC is intent on closing—the Corby iron and steel works. Thousands of words have been written and spoken about the effects of closing the Corby iron and steel works. Even if an economic argument for such closure existed, I should not apologise for bringing a simple social case before the House, but no such argument does exist. Nor do I apologise for having recourse to the support of an EEC Commission decision, despite my feelings about the EEC.
Since the closure of Corby was mooted, the BSC proposal has been under scrutiny from innumerable people. The BSC would have liked them all to consider one simple principle. Given that all else was left untouched, and accepting all the assumptions without question, would money be saved by closing the Corby iron and steel works and supplying the feedstock for the tube mills from Redcar?
BSC does not want to involve itself in detail, but whilst that may be good thinking in the BSC board room it is not good for the people of Corby or of this country. BSC's attitude begs many questions. Describing that attitude, one top Corby manager recently resorted to the old cliché of "We have made up our minds, so do not confuse us with facts."

However, as it ties in with article 4 of the decision that we are discussing, I shall address myself to the BSC principle. Corby is a completely integrated iron, steel and tube works, using its own iron ore and indigenous coking coal. The savings that would result from closing the iron mines, blast furnaces and steel making and rolling plants and supplying the strip feedstock from Redcar were estimated at £46 million by BSC and £6 million by Warwick university. Both figures related to current iron ore, fuel and transport costs. Both also admitted that Corby's costs could be substantially reduced by a small amount of investment to produce a far better production practice.
In the BSC estimates a number of costs relating to the Redcar undertaking have been ignored. The 14 metre furnace is accorded the ability to stockpile in anticipation of its recline period but no cost of such stockpiling is quoted. How much spare manpower has to be carried for the emergency of bringing on other blast furnaces if that furnace runs into difficulties?
There are also large question marks over Redcar's ability consistently to supply Corby. Corby uses its own ore. Is it unreasonable to believe that if our steel industry is entirely dependent on foreign iron ore—which it will be if the Corby mines are closed—an iron ore cartel similar to OPEC will grow up? I ask Conservative Members whether it is good thinking that, in the Government's sense of country security, whilst we put nuclear weapons all around the place, we leave ourselves in the position, in the face of conflict, of having to import every ounce of iron ore for the steel industry. If the cost of fuel is prohibitive to the production of steel at Corby, surely consideration should be given to the escalating costs of fuel for transporting strip from Redcar. What happens if there is a rail strike?
Even more important is the fact that this demonstrates just how little attention is being paid to the needs of the steel industry in this country. There is no evidence whatsoever that Redcar continuous cast steel will be suitable for the production of strip that is amenable to the edge-to-edge welding that is necessary for the production of tubes in the


Corby tube mills. In fact, the Corby technologists state quite categorically that at present the strip produced from "con-cast" steel is unsuitable. Also, it must be remembered that Corby tubes have a 70 per cent. monopoly in their section of the tube market in this country. What happens to that competitive situation if there is a breakdown in supply?
The BSC's case for closing Corby on a strict commercial basis exists only in the egos of those people who took the wrong decisions in 1973. There is an inability to admit that wrong decisions were made. Of course it will not be the decision makers—either among the politicians or the industrialists—who pay the price. It will be the people of Corby.
The other day I read on the wall of a probation office that the motives of the therapist were always more important than the motives of the client. That puts in a nutshell the BSC's attitude in threatening to close Corby. The Corporation is more concerned with protecting its own mistakes in the past than it is with curing the ills of the steel industry.
My aim tonight is to show that if this House accepts the motion Corby is the only steel industry unit that can comply with the requirements involved—receiving aid of a very limited amount, becoming competitive, or profitable, and not needing the aid any longer. It could do that within a reasonable time. It seems that I have to resort to the Common Market to prove the point that I have been trying to make for many months in other ways.
This brings me to article 5 of the document, in which emergency aids to cope with acute social problems are deemed acceptable to the Community. Not only would Corby suffer acute social problems arising from the proposed closure, but so would the Government. It has been estimated that the continuing costs of loss of taxation and payments to the unemployed amount to £30 million a year. In the Corby setting of a one-industry town this situation would not diminish rapidly, and there is no doubt that the closure would be a massive imposition on the taxpayers. That is not a happy thought for a Government elected on a mandate to cut taxes.
Acute social problems apply mainly to the people affected. Therefore, some reference to the background is necessary. In Corby at present there are 1,400 local authority owned houses and flats. Many have been boarded up to keep out vandals—not squatters. In fact, we could do with some of the latter if there were work for them. The Corby council has just taken a decision to pull down 200 houses, many of them less than 10 years old.
About 12½ per cent. of the population of Northamptonshire is in Corby and yet 50 per cent. of the county's suicides and non-accidental injuries occur in Corby. Corby's infant mortality rate is 66 per cent. higher than that in the rest of the county while its illegitimate birth rate is 5 per cent. higher and its crime rate is 20 per cent. higher. It does not need much imagination to realise that the article 5 requirement about "acute social problems" would be more than satisfied if the iron and steelworks closed. That would create a further 20 per cent. unemployment above the existing 7 per cent.
I contend that if the House accepts the decision—I am sure that it will—to close Corby that would be something that the Corby population could challenge in the international courts and win the case.

11.25 p.m.

Sir Anthony Meyer: I agree with much of what the hon. Member for Kettering (Mr. Homewood) has said about the strategy of the British Steel Corporation, in particular the way in which he based his case for the retention of steel making in Corby on strategic arguments—the risk of having a steel industry entirely dependent on uncertain supplies from outside.
The debate has been one of the most depressing that I have listened to in the House. The British steel industry, before and after nationalisation, has failed massively because of the constant interference by us politicians. To listen to hon. Members blaming everybody else for everything that has gone wrong—the fault of Parliament, the fault of our allies, the fault of world conditions—has been one of the most depressing tasks I have yet had. The failure is ours. It is up to us to find solutions. We should


not entertain fancy ideas that if we could only indulge in a partnership with Fiji, for example, everything would be all right. We are members of the European Coal and Steel Community and of the EEC and it is within those communities that we have to and can find an answer. The document addresses itself to that problem.
It seems odd to have the debate tonight without the presence of the hon. Member for Nuneaton (Mr. Huckfield). Those hon. Members who were present on the last occasion when these documents were debated still cherish the memory of the manner in which, having implored his hon. Friends to withdraw an amendment which purported to wreck totally the document before us, he found himself supporting that amendment in a Division he had begged his hon. Friends not to call. That is a memory that we shall long cherish. It is still green in the Department of Industry.
I support the decision in the document before us. At the same time, I express the doubt whether it will be adequate for its purpose. Like many hon. Members who have spoken in the debate, I am opposed to the British Steel Corporation strategy. I do not believe that it will produce an internationally competitive industry, because it pursues the cult of bigness without any critical faculty and because it puts all the eggs in five overlarge baskets. I accept that there must be a strategy for steel in the United Kingdom and that that strategy should be based on an orderly contraction of capacity and a steady process of modernisation. Modernisation does not necessarily mean turning all the works over to the steel making technique that happens to be fashionable at the moment.
It may be that other methods of steel making which at present are in an experimental stage will prove to be far more effective than the basic oxygen process, which is the currently fashionable method. It would be far more prudent to hedge our bets, to hold back on switching everything over to BOS and to be prepared to adopt newer technologies, particularly for some of the smaller works. For those reasons, and for the strategic reasons I spoke of earlier, I shall go on arguing for the retention of steel making at Shotton and others will go on arguing for the retention of steel

making at Corby. We shall do the best we can.
But it is not by the clash of opinions among those arguing for the retention of steel making at Corby and those arguing for its retention at Shotton and those who maintain, with good figures to support them, that steel making at Redcar is coming along nicely that a coherent policy will emerge. Nor will such a policy emerge in Europe by means of the "Gaullism" which speaker after speaker has called for. What will emerge from the aggressive Gaullism of the six steel producers in Europe will be a dog's breakfast and a recipe for disaster for the whole of the European steel industry.
The British steel industry can survive only in a protected European environment. We must hope that such protection can be phased out in time. If there is not to be swift and major disaster, there has to be protection on a European scale. That involves a process of give and take.
Let us not suppose that we are the only people suffering because of the contraction of the steeel industry. Those who argue thus must have short memories indeed if they do not recall the scenes which took place in Lorraine, France, in the area of Longwy, where whole communities were sentenced to death by the necessity to modernise the steel industry. Of course, it is a painful process and it will be no less painful if each of us stands on his soap box and demands that he has the whole share for himself. There has to be a coherent European approach.
In that process we are not in a position to lay down the law or demonstrate our superiority. Figures showing the number of man hours worked to produce a ton of crude steel are not very encouraging for this country. In West Germany it takes 5·9 man hours, in France it takes 6·4, but in the United Kingdom it takes 10. I do not have the Japanese figure, but it looks as if the figure is about three man hours. The steel industry is in crisis, in this country and in Europe generally.
We can, just, save a great deal from the wreckage if we co-operate with our European partners. It is because this decision marks a step, in my view an inadequate step, in this direction, that I support it. I believe that it will be necessary to give more powers to the central


regulating organisations, to give the Community more powers if it is to be effective. Subject to that, I support the document.

11.33 p.m.

Mr. James Tinn: I express my appreciation of the fact that the Government have given us the chance to debate these documents tonight. I do not complain about the hour. My colleagues and I are prepared to debate the situation in the steel industry at any hour of the day, so long as this is not taken to suggest that there has been any removal of the urgent need for a full debate on the position, unrestricted by the requirement to remain within the limitations of the documents.
In considering the documents, we must bear in mind the position of the steel industry in the context of its development over the past few years. I was glad that my hon. Friend the Member for Kettering (Mr. Homewood) was sufficiently frank to recall that the modernisation programme of the industry was based on estimates of steel demand which, unfortunately, had proved to be over-optimistic. One hopes that this will not be a permanent situation.
In a previous Parliament my colleagues attacked the cutback in the programme. The programme of modernisation that remained has proved to be over-optimistic, not because of the ordinary trade cycle in steel from which the industry has always suffered but because of new factors, including especially the emergence of competitive steel industries in parts of the world which previously no one in the industry could have expected to spring up. My hon. Friend the Member for Kettering and myself are two of only three Members of the House who not only have worked in the industry but represent constituencies where steel is produced.
The industry must be examined in the light of the catastrophic and unpredictable fall in demand. The modernisation programme which was undertaken and which many of us at the time legitimately criticised as being inadequate is now coming on stream, as I know from developments in my constituency. For the first time the British steel industry has capacity second to none in the world and is

competitive in every sense. We have one of the world's finest blast furnaces. This is the road along which the industry must travel if it is to become truly competitive and survive.
On the question of concealed subsidies and aids, the Government must ensure that the competition which the industry faces is fair and open. If it is not, the Government must ensure that our steel industry has at least the same kind of under the counter or behind the back assistance as that enjoyed elsewhere.
I am a strong supporter of the proposition that the industry must be modernised. It would be the worst of all worlds if, after the investment of the considerable sums which have been invested, there were to be no beneficial outcome. About three-quarters of the investment in European steel has taken place in the United Kingdom. This is a tremendous point to be made in favour of the British Steel Corporation, because such investment could not have happened under private enterprise. I am glad to say that much of the investment has taken place in my constituency.
A price must be paid for modernisation. The documents we are discussing make the point that it is legitimate to protect to some extent, but not permanently, the areas that suffer. As the representative of Redcar I am in favour of modernisation. At the same time, the town where I was born and which is ably represented by my hon. Friend the Member for Consett (Mr. Watkins) is in a different situation in that it is now totally dependent upon steel. It is facing the same sort of consequences as Corby and other towns are facing.
In defending the modernisation programme and spelling out its inevitability and economic reality, I join my hon. Friends in urging on the Government the need to ease the transition. It is indefensible for the Government to stick to March 1980 as the deadline for the BSC to break even. That is unrealistic. The date was fixed by the previous Government, but if we were still in power we would ease the transition. That does not mean merely assisting—as we all try to do—in the provision of alternative employment. That can never be a quick way. We need to protect existing plants. In a period of unpredictable and rapid transition to a desirable state of modernisation,


it cannot be wrong to ease that transition by extending the deadline by which the BSC must break even. That is my major point.
People in my home town and my constituency have grown up in the industry and have given it tremendous loyalty and commitment. In many areas, such as the constituency of my hon. Friend the Member for Flint, East (Mr. Jones), there is no alternative employment. One of the features of the industry—even under private ownership—has been the commitment and loyalty of the workers. They have invested not only their own working lives but the lives of their sons and daughters. There has been commitment to the industry from whole communities.
The situation that I have described surely imposes a compelling moral obligation on the Government to ensure that those communities are protected, and the most obvious way of doing that is by extending the deadline by which the BSC must break even. It is unfair for the Government to stick to 1980 and thereby force the BSC to make closures ahead of time, with all the consequences that I have outlined.

11.44 p.m.

Mr. Hugh Dykes: The whole House will have listened with immense respect and understanding and much sympathy to what the hon. Member for Redcar (Mr. Tinn) said about local problems, where in respect of individual plants the steel industry faces very grave and worrying problems of closure or reduction of capacity and, therefore, of employment. The same applies to the sentiments, ideas and proposals put forward by the hon. Member for Kettering (Mr. Homewood).
So often the industry is represented in those human terms more by Labour Members, but the tragedy is that we have to come to different conclusions when we consider the industry in a global, national and Community scale. That is a measure of the human tragedy, yet, as the hon. Member for Redcar had to concede when appealing for the break-even target to be set aside or postponed, it was the previous Government—with even less of an attachment to a more robust economic philosophy than the new Government—who had to reach a decision and a target for the essential future health of the steel industry. How much more important is

that target now when we see that the situation since that date has worsened considerably? The worsening situation in the steel industry of recent months is the same as the progressive worsening that has occurred in other European countries. There was something of a revival in 1973, but it has not persisted.
That is the measure of what my hon. Friend the Member for Flint, West (Sir A. Meyer) said, and I agree with him. Up to that point the debate had been depressing, because despite the overwhelming realities of the gravest crisis facing any heavy industry in Europe for many years, which is the crisis now facing the whole of the European steel industry, we had a worrying upsurge of narrow-minded nationalism from several Labour Members against the entire Community interest, and against our interests as members of that Community. That is no way for this House to rind solutions to these grave industrial problems.
What we surely need is positive and constructive co-operation between all the steel industries of the member States. Indeed, we must allow the Commission to have the necessary authority and powers—no more—to take decisions. This has already begun under the Davignon plan, and it has worked much better than many imagined when it commenced. All that we can ask for in these difficult circumstances is a reduction in the excessive capacity of the steel industry in all countries.
As a believer in the European Community and its future, despite all the warts and problems, nothing depresses me more than the awful nationalism that keeps emerging from Labour Members. What a slur that is on the crisis affecting French, German and Belgian steel workers! Where is the old solidarity that used to manifest itself in the Labour Party with all other similar political and social groups?

Mr. Homewood: rose— —

Mr. Dykes: I prefer not to give way, because of lack of time.
That is one kind of solidarity. We now need the operational solidarity which only the Community can provide through a document such as the one that we are discussing. This document represents a decision, not a piece of legislation. It


provides an essential flexibility. Some of its clauses are rather vaguely drafted, but I welcome that. I think that the latest revision is a substantial improvement on the original document and I hope that it will get the full approval of the Council of Ministers at its meeting next week. That is the sort of welcome progress that emerges when members of the Community begin to work together.
What I bitterly resent is the idea that the EEC is a wicked, evil Community, that we are members of it and that this alien body is inflicting its unwelcome, foreign decisions on a hapless United Kingdom. We are part of that Community. British officials are involved as European-minded officials—not with nationalist sentiments as a prerequisite—in the decisions behind this and other documents as well as the whole of the Davignon plan. The idea that it is inflicted upon us by an evil Belgian aristocrat who wishes to ensure the total reduction of the British steel industry and no reduction in any others is a monstrous slur on what the Community stands for.
Without the previous proposals and without this document, the situation not only of the British Steel Corporation but of the whole of the British steel industry would be much worse in coming months. The tragedy for British steel was the short-sighted ideological approach of the previous Government. There was a decision to create over-large units at a time when world demand for steel products was beginning to turn down and our own capacity was to become too large in relation to internal demand and export capability. This has also happened in other member States.
Big units were no longer applicable in this industry, the heaviest of our industries, as in many other industries. It is the extent to which each member State now supports the Commission whole-heartedly and the considerable panoply of aid capabilities of national Administrations, which are not contradicted by this document, which can help indigenous steel industries.
This is one of the best things that has come out of the Community in recent years. We may be prone and willing to grumble about everything. Nationalism is creeping in everywhere. The French

are grumbling about us. We are grumbling about them, and the Germans are grumbling about both of us. The issue is building up into a most unwelcome attack on what is not only a fine ideal—we need that in our political society—but a whole series of practical proposals for the genuine resuscitation of the entire European economy, including the steel industry.
I support this document. I hope that my hon. Friend the Under-Secretary of State can also negotiate successfully with our partners in the Council of Ministers on one or two of the flaws that may still exist. Nevertheless, this is a great improvement on the original draft. A lot of work has been done and the House should give it its wholehearted support as well as just take note.

Mr. Tinn: The hon. Gentleman seemed to be attacking the idea of large plants. Surely, even given the fall in world demand, it cannot be wrong for us, as a result of investment by the steel industry, to have large plants, able to produce steel at a cost competitive with our competitors anywhere in the world, including Japan and Korea. That must be right even if the original calculations of demand were wrong. The fact that this industry is now modernised must be good.

Mr. Dykes: I entirely agree. The situation now warrants that large scale structure. I am talking about the original calculations. That was the tragedy.
One of the indications of the way we get into a muddle on these matters and in this debate is that hon. Members, particularly on the Labour side, were not sure whether they were in favour only of national protectionism and disapproved of Community-wide protectionism, which is what this is. Any industry that is not facing a situation of expanding demand must be protected on a downward path as its capacity is reduced through deliberate action. They were in an equal muddle about condemning competition at home but wished presumably to see some competition in the Community because they wanted the British Steel Corporation to be untrammelled, on the one hand, but apparently, by inference, heavily subsidised, on the other. Those contradictions can be eliminated from the debate only by the support this House gives to the Community proposals.
I regret that I disagreed with my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) when he referred, understandably, to dumping and hidden subsidies. My hon. Friend mentioned only one example—German coking coal. I hoped that he would refer to other examples. My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) suggested that the British Steel Corporation was dumping refractories not only internally but externally. We can all argue that. On the evidence one must say that dumping might be taking place—and I am not sure that it is limited to the other member States.
I hope that the House will not think that I have made a speech against the BSC—far from it. The House must be realistic. This document provides a central realism, and the Government are being realistic.

11.55 p.m.

Mr. David Watkins: I have always had a regard for the hon. Member for Harrow, East (Mr. Dykes), but it is a bit much for him to be so scathing towards my hon. Friends who represent steel constituencies. They are doing what they were sent here to do they are speaking up about the problems in their constituencies.
A couple of weeks ago a group of French steel workers visited my constituency. If the lion. Member for Harrow, East thinks that he has heard narrow nationalism from the Opposition Benches tonight, he should have heard what some of the French workers said about the effects of the Davignon plan and the closures of plants in their areas.
The draft decision has clearly been reached only after considerable thought and after much revision of the original documents.
I recall the debate on 25 January this year, on an amendment moved by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), when exception was taken by Labour Members to proposals contained in draft documents to restrict Government support for the steel industry. With one honourable exception, there was near-total acquiescence from the Tories to the plan to restrict what could be done by any EEC Government to help the steel industry through its world-wide difficulties.
The sentiments expressed here and elsewhere have contributed at least marginally to the different approach in the document that we are now discussing. Many questions have still to be answered, but I do not recall any EEC document which did not raise at least as many questions as it purported to answer.
My hon. Friend the Member for White-haven (Dr. Cunningham) made a valid criticism about regional policies. The document moves in the right direction. It gives Governments greater freedom to aid the steel industries, especially in regions where difficult problems are caused through the contraction of the industry.
The document enables not only Governments but regional and local authorities to give aid to the industry. That is of particular interest today, when a number of local authority general powers Bills are in the pipeline. They give local authorities power to encourage development to replace the rundown of old industries.
It is ironic that whereas in the last Parliament the Labour Government were fighting to aid industry against restrictive EEC policies, now, with a slightly easier attitude in the EEC, the new Conservative Government are determined not to support the steel industry.
The Government have placed the British Steel Corporation in a financial straitjacket. The sole criterion of their policy is that the industry must make a profit, and quickly, regardless of all other considerations. This point was made very clearly by my hon. Friend the Member for Redcar (Mr. Tinn). My hon. Friend is also my constituent, and I am most grateful for his kind words. I wish that all my constituents were as fulsome in their tributes.
The policy that has been forced on the British Steel Corporation takes no account of the consequences for areas that are heavily, near totally, or totally dependent on the steel industry. My hon. Friend the Member for Kettering (Mr. Homewood) pointed out graphically the tremendous problems facing Corby, which is apparently to be allowed to die. The same situation arises in Shotton.
The consequences for my constituency, however, are potentially even more serious. Last Friday the plate mill at the


Consett works was closed, in pursuance of the policy with which the Government have saddled the corporation. More than 400 jobs were lost at a stroke. The works in Consett, which once employed 6,500 people, now employ fewer than 4,000, and face considerable further contraction. In the town 50 per cent. of all the registered employed people work in the steel works. Another 25 per cent. are in jobs that are directly dependent upon the existence of the steel industry. No business of any description in the town of Consett could carry on as a viable proposition if it were not for the wealth injected into it by the spending power of people employed either directly in the steel industry or in industries directly dependent upon it.
Over the years the area has lost 15,000 jobs as a result of the total disappearance of a once flourishing coal mining industry. It is relatively remote from alternative sources of employment. These circumstances, therefore, exactly fit the conditions for the giving of aid by Governments as laid down in the document. Article 2 specifically refers to the need to take account of structural and regional problems. Those are just the problems that I have been seeking to outline. Article 4(2) instructs the Commission—the very pinnacle of the pyramid of Common Market bureaucracy—to take account of these sorts of regional problems in assessing Government proposals.
Article 3(2) refers to expenditure for redevolping sites, buildings and/or infrastructures of steel plants that are closed down, and of redeveloping them for alternative industries. I referred to the closure of the plate mill at Consett, which leaves a site available for exactly that sort of development. The regional significance of that site is very great. Its importance goes far beyond the town of Consett and well beyond the boundaries of my constituency. It is the only truly large site that is available in a very wide area for potential industrial development on any major scale. It is a hilly area, where problems of subsidence remain, notwithstanding that the coal mines have ceased working. There is literally no other comparable site for many miles in any direction towards which anyone might wish to look. For regional reasons

it is essential that it should be redeveloped.
All experience in the North-East shows that in the assisted regions redevelopment will take place only if there is Government aid and encouragement to assist it. In the widest sense we are talking about regional policies, and tonight we must know the extent to which we are dealing with a narrower interpretation or a wider interpretation. The Minister of State has said that both ways are open. Let me make it clear to the hon. Gentleman that the interpretation must apply to regional aid in areas that are severely hit.
At Question Time the Prime Minister indicated that she conceived it to be a prime duty of the Goverment to obey the edicts of the EEC. At a time when the potential edict shows some marginal moves towards support for Government intervention, it will be interesting to see how far the right hon. Lady's words will apply to the edicts from the EEC that refer to the iron and steel industry.
The document indicates that the EEC is showing welcome signs of recognising that there is an unanswerable case for Government aid and intervention in all member countries where there are problems. However, the Government are determined not to help the steel industry. Seemingly they are determined not to help the regions that are heavily dependent upon an industry that, for reasons we all understand, is in a state of severe contraction.
I have no doubt that when it comes to the crunch on EEC directives and edicts circumstances will alter cases. It will be interesting to see how the Government react to, and what interpretations they put upon, the edicts, as the Prime Minister called them, that are increasingly in favour of Government intervention—something that the Government have set their face against. If the Government persist in their attitude and present policy, it will bring nothing but misery to steel communities throughout the length and breadth of these islands.

12.8 a.m.

Mr. David Crouch: I am glad that the hon. Member for Consett (Mr. Watkins) reminded us of the comments of the hon. Member for Whitehaven


(Dr. Cunningham) concerning the problems that might affect the Government's application of regional aid. It is a question that was not answered in my hon. Friend's explanation of the so-called decision.
In the memorandum issued by my hon. Friend the Minister of State, dated 20 July, it is stated in paragraph 2:
The draft decision is intended to ensure that actions taken by member States individually do not impede the overall process of restructuring the Community steel industry. It relates solely to specific aids (i.e. those of a type or with terms peculiar to the steel industry)".
So far so good. Paragraph 6 says that:
the impact of the decision is to enlarge and not to restrict the powers of HMG in relation to assistance to the UK steel industry".
It seems that there is some conflict. There is a conflict involving the application of structural aid on a regional basis, which is not necessarily structural aid to the steel industry but to a region itself. Is that infrastructural aid?
Article 2 of the Commission's decision refers to:
account being taken of the structural problems of the region where investment is to be undertaken, and … limited to that which is necessary for this purpose".
It seems to make an exception of that type of regional aid. When the Minister replies it would be helpful, in view of the points raised by the hon. Members for Whitehaven and Consett, to have these matters clearly stated.
We are considering tonight not just the British steel industry. I am not speaking, as has every other hon. Member tonight—with the honourable exception of my hon. Friend the Member for Harrow, East (Mr. Dykes)—of concern about the steel industry and about the constituents whose interests must be emphasised in the brief three hours of the debate. Hon. Members have been fighting for the interests of their constituents and for the interests of one of the basic industries of Britain. I have no such industry in my constituency, apart from one company, which distributes steel in the South-East. With the greatest respect to my hon. Friend the Member for Harrow, East, a distinguished spokesman for Conservative thought on European matters, and his respect for Count Davignon, I have to say that I have more respect for the people who are losing their jobs today than I

have for any Count Davignon. I really mean that.
My hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) spoke sincerely about his constituents who are losing their jobs because of these Community and Commission decisions emanating from Brussels. There is no stronger European than myself. In the last 20 years I have been almost blind to any of the deficiencies that might emanate from the Community. I am not blind to them any longer. I still believe as passionately as ever in Europe, but I have grown older and perhaps a little wiser. Today, after being involved for years in Community affairs, I am prepared to say that this worm will start to turn. This worm will start to speak up for this country.
This is not only a debate about steel, Mr. Deputy Speaker; it is a debate about Britain in Europe. It is a debate about a draft Commission decision establishing Community rules for this Parliament to accept. I was not present this afternoon to hear my right hon. Friend the Prime Minister describe such decisions from Brussels as edicts, but there is today no stronger critic of Brussels than my right hon. Friend, as I am sure the whole House and the whole country know.
It is not a question of Britain turning against Europe, either in the middle of the afternoon or late at night; it is a question of Members speaking in this House—still the first Parliament in the world—where Members represent so many interests so passionately and, if I may say so, speak with such care and with such good briefing as the hon. Member for Kettering (Mr. Homewood), among many others.
I have listened to all the speeches in the debate tonight. There is a multitude of words emanating from Brussels. I hope that some of the words spoken in this Chamber will in turn be read in Brussels, so that it will be known that these things are being said not merely by spokesmen on the Front Benches or by members of the Council of Ministers from this member State, including our Prime Minister, but by Back Bench Members who also speak today for Britain, speak for their constituents, and are concerned about their constituents' future in this country and about this country's future in Europe.
We have to have restructuring, of course, and I accept that it is painful. I have seen the closure of coal mines and I have seen our coal industry diminish. I cannot say that I know how painful it is, as I have not been a coal miner, but I have had miners as my constituents, and I can only reflect—and have done so in this House—to the best of my ability the pain that they have felt in the economic restructuring of a major industry.
I have met steel workers in the Lobbies of this House—men who came to me when I used to speak on industrial matters, knowing that I had nothing to do with the steel industry. But we are all concerned with the steel industry if we speak in this House. We all have a right to be lobbied. We all have a right to listen. We all have a duty to speak.
We do not have a duty to destroy. No one tonight has sought to destroy the grand plan—the grand strategy—that has come out of Brussels and has largely been agreed by all the member States. However, a few warning shots have been fired across the bows of Brussels, saying in effect, "Before you move, remember that people feel passionately about this problem in Britain today. Please, before you act, remember that it is not you in Brussels who lay down the law." My hon. Friend the Member for Harrow, East says that Brussels lays down the law. I cannot accept that Brussels lays down the law. The Council of Ministers agrees to a certain structure plan and to certain decisions in the interests of the growth of the Community, but from the Government Back Benches I fire a small warning shot over to Brussels—I do not hold a big gun—and say "Watch out. This House still speaks for the people of this country."

12.16 a.m.

Mr. Allen McKay: I am grateful for the opportunity of speaking in the debate tonight. It has been a good, level debate, because many hon. Members have spoken with sincerity and conviction according to their feelings.
The irony is that the Government are defending a planning agreement—because it is an agreement to plan the Community's steel output. Hon. Members have referred to protection, and give and take. I feel that recently we have been giving and everybody else has been taking.
There has been talk of solidarity. Hon. Members have talked about solidarity on the Labour Benches and in Europe. The solidarity is still present, but we look at it in a different way, possibly, from the hon. Member for Harrow, East (Mr. Dykes). I did not accept the Labour Government's advice and decision in the last debate, to take note of the document, because I did not agree with what was in that document. Indeed, I was tempted to seek a Division on this motion to take note, because I saw very little change in the document.
For example, the only thing that I get out of the supplementary explanatory memorandum is the statement
that the Decision should not affect advances of capital to BSC".
I am sure that many of my constituents will be grateful for that statement, because the latest announcement by the Secretary of State for Industry put fear in their hearts that the capital investment recently made would be taken away as a result of the slight hiccup in the economy.
It saddens me to hear talk of the steel industry not reviving and of the hiccup in the economy not being followed by an upturn. Similar arguments were put forward about the restructuring of the coal industry in the 1960s. It was said that it was not necessary any more; we did not need the coal any more; the outlook was different. Indeed, Europe restructured its coal industry more severely and viciously than we did. I cannot think of any hon. Member who would not like to go back to the 1960s and think again about the coal industry and the closures that took place for economic reasons.
I look back at those debates on the coal industry and relate them to the steel industry's situation now. Can we be sure that in the 1990s we shall not look back to the 1970s and say "We were wrong about steel, for the protection that we should have given it but failed to give would have meant a powerful steel industry for Britain"? Are we to take the same notice of Europe's rundown of its steel industries as we did of Europe's rundown of its coal industries? Are we to fall into the same trap over steel as we did over coal?
Many hon. Members have talked about the dumping of steel in this country, and it is true enough. Hon. Members


from Sheffield asked to see Ministers in the Labour Government about the situation, and they accepted the arguments that we put forward, realising that there was some merit in them. The effect of the dumping is not entirely confined to the BSC; it affects the private owners. The private special-steel undertakings are suffering from what we allege to be dumping.
The hon. Member for Brigg and Scunthorpe (Mr. Brown) suggested that the steel industry should look elsewhere for its coking coal. That would be a road to disaster, not only for what remains of our mining industry supplying coking coal but, in the long term, for the steel industry. To run down the mining industry and depend on imports would mean that we would not be far from killing the steel industry also.
The fact remains that European steel is heavily subsidised by its coking coal. This has a ripple effect on all our industries, because European coking coal is subsidised to the rate of about £28 a tonne, compared with our 2p per tonne. It means that the Europeans can produce steel more cheaply than we can. That is why they can produce steel more cheaply for their cars than we can for ours. The ripple effect is tremendous, and needs careful consideration.
I ask the Minister to look at some of the effects of the articles in the document and question whether the freedom that he suggested is really still there. Article 6 says:
The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter
the aids referred to. To me, that means that the Commission can at any time veto what we decide is a British prerogative.
I am still a great believer in Britain; I am still a great believer in the British people; I am still a great believer in the idea that we could make our own way without the Community. I accept that we are in the Community, but that does not mean that I have got to like it. I am sure that if we send this warning shot out from the House to Brussels we will renew our faith not only in our steel industry but in its work force. In these times, that is the least that we can do We certainly owe it to them.

12.23 a.m.

Dr. Jeremy Bray: I, too, pay tribute to the sincerity and eloquence with which hon Members have spoken of the steel in dustry. It is natural for those who represent steel constituencies to reflect the strength of feeling expressed to them in their constituencies. I welcome the contributions of the hon. Members for Canterbury (Mr. Crouch) and Harrow East (Mr. Dykes). However, it is not simply the wicked alien Community over the Channel that we are worried about, it is the wicked alien Government that we have here, because that Government are really the source of the difficulties that our steel industry is facing.
There is a need for effective Community review of the steel industries in the EEC countries. Indeed, the EEC has a bigger job to do in other member States than in Britain, and I would not wish to discourage it from getting down to work in those countries.
The greater realism of the redrafting of the decision is helpful. It will make the Community's review more effective in its influence upon the steel industry. When we debated the previous draft I appealed for a wider basis for steel policies in the Community, which would draw in the relations between the trade unions and the industry. These are developing in a thoroughly healthy way, in which British steel workers are contributing as much as are those in other European countries.
There is, however, a danger that as we become clearer and more articulate about the state of the steel indutry we may drive subsidies in different countries upstream, on the one hand—as with coking coal—and downstream on the other, to the fabricators and users of steel. Once steel reaches a heavy steel fabricator or the motor industry, the network of discounts, delivery conditions, quality premiums, and so on, that are applied in the Community conceal a host of subsidies.
I have been conducting a campaign against the Department of Industry over the extremely lax way in which it has allowed our heavy steel fabrication industry to be murdered by unfair competition from Europe. Every major contract for large steel pressure vessels in this country goes to European suppliers, but the steel industry and the fabricators


in this country have ample capacity to cover these. They are thoroughly competitive in every technical and measurable economic sense. But because the Department of Industry requires strict accounting conventions—which one would never get from a French or Italian company—a thoroughly unhealthy position is developing in the steel market.
Extra political clout is brought in upstream from the miners. When in Europe or in this country they talk of subsidies for coking coal, it carries weight. In our engineering industry we are not used to subsidies being sharply highlighted, but they are a major factor, particularly on capital goods, in the Community. I hope that the Department of Industry will continue to seek ways in which a more effective oversight may be taken.
In the restructuring needs of the steel industry there is the negative aspect of closures. Fresh initiative is needed over Corby and Shotton. The closure of the steel plate mill in Consett has been referred to. In the steel industry generally in this country there has been remarkable collaboration from workers with the restructuring efforts of the British Steel Corporation. Today, trade union officials met BSC and effectively agreed on the closure of Lanarkshire steel works and steel mill, in my constituency, with the loss of 4,000 jobs.
There is, however, the positive side of restructuring, which makes us accept the negative side. Massive investment is taking place in the British Steel Corporation and it is bearing fruit. At Ravenscraig the new capacity is coming on extremely effectively and efficiently, and the new plant is performing well.
There is the appalling problem of the failure to open the Hunterston ore terminal. I frankly admit that that failure is due to an inter-union dispute, which puts trade unionism in the worst possible light and in a position that no hon. Member on the Labour Benches could possibly defend. We are bringing all possible influence to bear on the trade union through a committee appointed by the TUC. The Under-Secretary of State will understand that from the communications that we have had throughout the recess.

Mr. David Lambie: My hon. Friend stated that the dispute at Hunterston was an inter-union dispute, but the Government could help solve it if they designated Hunterston a scheme port, which would give the dockers some security at work. At the end of the day that dispute could harm the entire Scottish steel industry. The Government should give a lead.

Dr. Bray: My hon. Friend is entirely right about the importance of the designation of Hunterston as a scheme port. Ministers have said that they are prepared to consider this once the question of job designation between the unions has been resolved, and the unions have accepted that they must first reach a prior agreement. I hope that when they have reached it the Government will be forthcoming. We on the Labour Benches have assured the unions that we will give them all possible support on the designation issue, when that arises.
The restructuring extends beyond the closure of steel plants and the opening of new investment to embrace the redevelopment of steel sites. We are not making proper use of Community facilities in that direction. Under the European Coal and Steel Community legislation massive funds are available for what are called conversion loans, which have not yet been taken up in this country.
We have an activity in the BSC itself—BSC Industry—which has done some useful work in Glengarnock and Cambuslang, but it has done practically nothing in the Motherwell area, where the major problem exists. We have a nasty feeling that this is because BSC is a little reluctant to bring new jobs into an area in which it has a continuing major interest because this would increase the competition for employment of scarce technical skills. I have told the BSC management over and over again that that is an extremely short-sighted policy. We want to see a major effort by BSC Industry to help fill some of the 4,000 job losses that we have suffered as a result of the rundown of employment in the town's steel industry over the past five years.
I put two specific points to the Minister about the European Coal and Steel Community funds that are available under the restructuring programme. First, will


the Government give a fair wind to applications for ECSC funds specifically for conversion loans for proposals from local authorities in areas affected by steel closures?
Secondly, will these conversion loans for redevelopment go to private ventures or joint ventures between private and public agencies, if need be? Will these conversion loans be excluded from the general needs capital allocation to local authorities, or, more broadly, within public sector accounting, from the public sector borrowing requirement? Where these loans are from the European Community—outside the country—to private bodies undertaking redvelopment, surely they can reasonably be exempted from the capital programmes of the local authorities and the wider public sector borrowing limits. If there were some such move on the part of the Government they would find an enormous release of new initiatives from the steel-making areas, including my own. A lot of lively initiatives are coming forward to create new employment, and it is absolutely vital that these succeed and be given every support by the Government.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): There are four hon. Members who have indicated that they wish to take part in the debate. I remind the House that Front Bench speeches will begin at 12.45 a.m.

12.34 a.m.

Mr. Martin Flannery: This debate is almost a re-run of the one held on 25 January last, and I wish to complain, as I did last time, about such an important matter being discussed at this time of night. This happens with all the Common Market documents. They engulf us. There are far too many to read properly.
I wish to comment on some of the contributions that we have heard tonight. Last time I defended the proud record of internationalism that we have on the Labour Benches against the very same speech of the hon. Member for Flint, West (Sir A. Meyer), who is besotted with the EEC and seems to see nothing wrong with it at all. The hon. Member for Sheffield, Hallam (Mr. Osborn) is in a similar category. I congratulate the hon. Member for Canterbury (Mr. Crouch), who has seen the light about the matter

and has realised that one can defend one's country and still be an internationalist. One should not be accused in the terms that have been used. The hon. Member for Brigg and Scunthorpe (Mr. Brown) made his courageous contribution because, like many of us, he feels the pressure of a great steel constituency and therefore sets out the reality of the matter.
I am ashamed that the Labour Party will not be voting against the document. It is totally wrong that our Front Bench is colluding with the Government Front Bench, as happened on the last occasion. When a similar document was discussed last time and our spokesman resumed his seat we did not know which way he would vote. The hon. Member for Flint, West was absolutely right about that. There was then the ridiculous spectacle of the Labour Government voting for an amendment that was put down by the hon. Member for Sheffield, Heeley (Mr. Hooley), among others. Let me refresh the minds of Conservative Members, for they have nothing to be proud of. They mustered five votes, and two of those votes were Liberal.
This is an arbitrary, peremptory measure. It is almost an Order of the Day, with militaristic connotations. It is entirely in line with the give-away statement that was made by the Prime Minister this afternoon, when she inadvertently slipped into using the word "edict"—an order from on high, telling us what to do. The language of the document reads:
the amount and intensity of aid are justified by the importance of the restructuring effort involved.
In other words, how many people have been sacked and how many steelworks have been closed down in Scunthorpe, Sheffield, Rotherham, Corby and Shotton? I am surprised at the joyful agreement of the hon. Member for Flint, West to the measure. The people in our constituencies will lose their jobs. We are being literally ordered by the Government on this matter. We should be clear about the fact that there is no democracy in the Common Market; there is a group of Commissioners, who issue edicts. We are told in documents like this that we must obey them because they, in some way or another, know what is best for us. Apparently, our constituents do not know what is best for them.
The document further states that:
Member States shall with effect from …, submit six-monthly reports to the Commission on aid decided upon in the course of the previous six months. These reports must be forwarded within the two months following the end of each six-month period and shall contain the following information on each closure:

—an identification of the undertaking or plant closed;
—the amount and precise nature of eligible expenditure due to the closure;
—the amount, nature and other particulars of the aid."

As on the last occasion, the document states that we are being told not to invest money in our steel industry without the permission of the Commissioners. That is why we produced the amendment for which the Government eventually voted and against which a few Tories voted. In this document the statement has been muted a little but the reality is that we are being told that we shall not receive aid unless we fulfill the criteria that have been undemocratically laid down from the Community. That is what we are being told. Our Front Bench is colluding with the Government Front Bench, as it colluded with the then Opposition Front Bench, until we pulled it to order last time and got it to vote in an intelligent manner.
We defeated this proposal six months ago, late one night, as usual. The debate began at 10.18 p.m. and ended at 12.47 a.m. It will be similar this time. I ask the Labour Party: why is there no vote tonight? Why are we not voting against this? No one consulted us. No one asked us what we thought about it. We received an edict. Let us be clear. Even at this late stage we few here should go into the Lobby against the proposal, so that we can tell our people that we are totally opposed to this document. It is a peremptory, arbitrary edict, worded in the way in which orders from on high are given to lesser people. I do not see that as an order that we have to carry out. It is against British industry. It is like the common agricultural policy.
The hon. Member for Flint, West says that he is against national protectionism. But he is for international protectionism, apparently, in the Common Market. I heard another hon. Gentleman say that he was passionately against protectionism,

but he was for it on a European basis, as in the Davignon plan, or as in the proposal before us. This document and others like it, strike a terrible blow against us and the British steel industry. It is disgraceful that the Labour Party is not voting against this document tonight.

12.42 a.m.

Mr. Frank Hooley: In the course of the debate on 25 January the hon. Member for Arundel (Mr. Marshall), who is now on the Government Front Bench holding the rank of Under-Secretary, said:
I start by making the assumption that in looking at these four documents
—there were four of them—
we are concerned with matters which go to the very heart of the future of the British steel industry."—[Official Report, 25 January 1979; Vol. 961, c. 863.]
The speech that we heard tonight from his hon. Friend the Minister of State gave a totally different presentation of what we are discussing. He argued that the decision had now been so drastically modified that it meant practically nothing at all. I would be interested to know what aids he thinks are now covered by this document He says that it does not affect risk capital or the advancement of public capital by Government to the British steel industry. I gather that he said that it did not affect regional aids. We had an ambiguous statement from him about the legality of this argument as between articles 232, 92 and 93 of the Treaty of Rome. If I understand him correctly, he was saying that it was legal until 31 December 1981 but not thereafter. That struck me as being an odd form of legality. Perhaps he can expand on it.
All in all, I was at a loss to understand what the controls and restrictions now were in terms of this decision. One of the curses of this type of debate is that we never know what document we are discussing. My hon. Friend the Member for Whitehaven (Dr. Cunningham) quite properly drew attention to discrepancies between the Government's explanatory memoranda earlier and later this year. There are also discrepancies in the draft decision appended to document 4627 and what is here called the unofficial text of that Community decision—whatever that is supposed to mean—which is in many respects quite different. The House has


no official document telling us exactly what the provisions of the decision are.
In reporting the Government's change of attitude the Financial Times said that the Commission would place strict limits on specific financial aids to steel producers and have authority to examine and reject regional aids and subsidies. That was the construction that the report in the Financial Times put upon it. However, it was not the impression that I gained from the Minister earlier. He gave me the impression that there was a whole range of capital—risk capital, and all sorts of things—that it would be perfectly easy for us to inject without any limitations from the Commission. The hon. Member for Arundel, who previously thought that this was a matter of fundamental importance, should now explain whether this is or is not a matter of fundamental importance to our industry, and does or does not give the Commission wide-ranging powers to restrict the supply of funds to our steel industry either in the public or the private sector.
My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) said that restructuring had a positive as well as a negative aspect. I am glad that he said that, because I want briefly to touch on that part of the question of the restructuring of our steel industry. We have had harsh and bitter decisions about Shotton and Bilston, and we may be faced with savage decisions in respect of Corby, though I hope that that will not happen.
There are other aspects to the work of the British Steel Corporation particularly. During the Summer Recess I had the great pleasure of visiting the fine, modern complex at Aldwarke and Thrybergh, in the constituency of my hon. Friend the Member for Rotherham (Mr. Crowther), where it was a pleasure to see the steel flowing steadily through one of the most modern plants in Europe, if not in the world.
In Sheffield we have the great stainless steel complex at Shepcote Lane, which has cost about £150 million to produce and is now steadily beating output records week after week and month after month. This is because the British Steel workers there have got the equipment that they were denied for so long under private enterprise. Now that under public enterprise

they have the equipment they are showing that we can produce steel as effectively as any of our international competitors.
I mention the River Don works in Sheffield because it has been a matter of concern and uneasiness in Sheffield and, I believe, was the subject of some comment by the hon. Member for Arundel recently. There was an interesting headline in the Steel Corporation's magazine the other day to the effect that investment in the works was beginning to pay off. The magazine referred to the forging of rotors for the heavy electrical plant and pointed out that in certain important respects—in the heat treatment of ingots, in the hours spent on forging, in the hours spent on machining, by the use of new equipment—the works was steadily becoming more and more efficient and more and more competitive in the international market in this important respect and was fulfilling orders within eight months as against 11 months a year or two ago, and would soon be able to fulfil orders within six months. Exports have been won to Brazil, France, Germany and Sweden, and there has recently been a major breakthrough in the American market with railway bogies, with a contract worth £3 million.
This has been achieved by hard work, by new investment and by enormous sales effort, but it is possible that the River Don works will not break even financially by the end of this year and perhaps not for 18 months or two years.
I want to know whether, in such a case, the Government will be able and willing to aid this important plant, which is doing great work in securing valuable export orders for this country and, if the Government are so willing, whether the document will prevent them from so doing by some edict from Brussels. This is a matter of great importance to Sheffield and to BSC.
In view of the time, I shall not go on to discuss questions concerning the private sector of the industry. However, there are considerable structural problems in the private sector in Sheffield as well. It may well be that that sector, too, will need some form of aid from public funds within the next few years. I wish to know from the Minister whether that sort of aid will be forthcoming under the terms of the document before us.
The Minister of State painted a rosy picture of what could be done under the directive, but it was in contrast with the words of the opening article of his unofficial text:
Specific aids to the steel industry financed by Member States or through State resources in any form whatsoever may be considered Community aids
and therefore subject to control by the Commission. We need more clarification from the Government about what powers the directive will give to the Commission.

12.50 a.m.

The Under-Secretary of State for Industry (Mr. Michael Marshall): An hon. Member said earlier that in many senses we had had a re-run of our January debate. I find myself again in the difficult position of having to make a concluding speech in just over 10 minutes. I shall have to move fast over a number of the valuable points that have been made.
Two speeches rang a bell with me. The first was by my hon. Friend the Member for Flint, West (Sir A. Meyer), who spoke about the problems that we politicians have created for industry generally and for the steel industry in particular. The other speech was that of the hon. Member for Redcar (Mr. Tinn), who referred to hon. Members who have had the privilege of working in the steel industry. I am one of those Members.
I left the steel industry and came to the House because I was concerned about the increasing political dimension. I hope that the House will accept that I mean it as a compliment when I say that the debate has been constructive. Hon. Members on both sides have faced realistically the background to the debate, which is that we are still, alas, in the middle of the longest and deepest recession that the steel industry has known, certainly since the war. That overshadows much of what we have had to consider and explains many of the great human problems of closures to which many hon. Members have referred.
The hon. Member for Whitehaven (Dr. Cunningham) raised a number of detailed questions. I compliment him on the way in which he addressed himself to

a number of key issues in a difficult subject. I hope to be able to return to his speech, because he summarised many of the queries raised by his hon. Friends.
My hon. Friend the Member for Shetfield, Hallam (Mr. Osborn) brought in the wider perspective of his European experience and reminded us of some of the difficulties. The Government realise that there are problems in looking at dumping cases, which were mentioned by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown), where evidence is not always easy to find. Like our predecessors, we shall pursue with the utmost vigour approaches made to us in instances where it is possible to make a dumping case.
Part of the problem that we face in present trading conditions relates not so much to dumping as to the growth of other trading countries outside the Community. The whole dumping argument must be widened into the agreements made within the Community not just on price levels but on voluntary restraint with third countries. That is an increasingly complex and difficult area, but no hon. Member has suggested anything other than the accepted fact that the Davignon plan has provided a valuable breathing space and contributed substantially—by many millions of pounds—to the earnings of all steel makers in this country. That view is shared not only by the BSC but by the British Independent Steel Producers' Association, and it is urged on the European Coal and Steel Consultative Committee by the trade unionists who take part in its deliberations.
The hon. Member for Rotherham (Mr. Crowther) spoke about meeting the Commission's criteria for restructuring, but he must understand that we are in a negotiating situation. There are many involved in this process. It is fair to say that Mr. Roy Jenkins is not someone whom the hon. Gentleman would assume in some way to be automatically inclined to play favourites or not to see the balance of advantage being fairly argued out. This kind of general negotiating background must overlie many of the problems mentioned tonight. It is not a static situation. It is right that hon. Members should refer to problems, and we are willing to play our part in seeking to resolve them.
In giving a general assurance to some hon. Members who have raised particular difficulties, it must be remembered that in all that we do there lies behind the provisions of this draft document the Council of Ministers. There are many opportunities to make our views felt. As my hon. Friend said when opening the debate, this is, after all, a trial period. It is because of this Government's insistence that we have sought to put a limitation on the period under which these arrangements should run, and as a result I believe that we have seen a step forward from what we debated last January. In another sense, it is because of views expressed from all sides that in this draft document we see a number of changes from what was proposed in January, about which I and others expressed reservations.
Mention was also made of the competition in subsidy. A number of hon. Members mentioned coking coal. Here is a situation in which other countries are entitled to say "You subsidise in your way; we subsidise in ours". The whole point about trying to get agreement on steel aids is that we should cut out wasteful competition on subsidy. A war of subsidy is something that this country simply cannot afford. I believe that most hon. Members know in their hearts that that is the case.
The hon. Member for Kettering (Mr. Homewood) made a speech that we well understand. He has made many approaches and representations. We appreciate the problems of Corby. Likewise, the hon. Member for Consett (Mr. Watkins) highlighted the problem of closures and reminded us that this was a real and human element in the situation.
However, I was a little surprised at something that the hon. Member for Red-car said. If he cares to read the Official Report he will see that I spoke in somewhat glowing terms about part of his speech. However, I think that he brought out the dilemma that is facing the British Steel Corporation. After all, if the new Redcar blast furnace, which is one of the largest in the world, is not allowed to operate quickly at the full-scale production that is necessary to achieve the kind of economies that are necessary to make the plant work effectively—

Mr. Tinn: rose——

Mr. Marshall: The hon. Gentleman will have to forgive me, but I have very little time. Perhaps we can chat about it later. The point that I am making is that he will well appreciate that the problems faced by the British Steel Corporation include the way in which morale is sapped if new plant is not allowed to move into full and effective operation. That is part of the difficult balance that lies behind this problem.
The hon. Gentleman went on to argue for a delay in the break-even date. The point that must be faced, as the hon. Gentleman fairly did, is that his own Government had underwritten the target of break-even which the British Steel Corporation had set 18 months ago. The difficulty is that if one begins to say that Government should in some way intervene so that the self-imposed target is set aside, one is on a slippery slope. The question that then arises is for how long should it be set aside and what more exceptions should be made. We are back to the point that my hon. Friend the Member for Flint, West made. We must be willing to let the BSC and the trade unions work out these matters.

Dr. John Cunningham: Will the hon. Gentleman clarify the question that a number of my hon. Friends have asked? If the BSC does not break even next year, and has a loss, how will that loss be treated under the provisions in this document?

Mr. Marshall: The question of loss is not related to this document. The hon. Gentleman knows perfectly well that that is a matter that we shall have to consider if the situation arises. It is right to remind the House that at present the chairman of the corporation is expressing his determination to maintain that target. I do not think that it helps him or the country at large for us constantly to go on picking at this and trying to imply that in some way the target is unrealistic.
I want to move quickly to some of the points raised by the hon. Member for Whitehaven, who, in a sense, summarised a number of points raised by many hon. Members. He sought assurances on no further closures. He knows, in asking the question, that that is a matter for the British Steel Corporation. Nobody welcomes closures. Closures at this stage,


we hope, have reached just about the end of the line. When we speak of Corby, the hon. Gentleman well knows that the Government of which he was a supporter felt it right at that time to let the British Steel Corporation and the trade unions go ahead with their negotiations. This is the view that we have had to take in the matter of Shotton.
Regional aid goes much more towards the heart of the document before us. I assure hon. Members that we do not in general accept the principle of Commission control over our freedom to pay regional aids. On the other hand, there are certain sectors of industry—this is where hon. Members must be aware of the need to get down to cases—where sometimes we find that there are advantages in placing some restriction on regional aid. The example of dairy products has been raised. We must look at these matters on a case-by-case basis. It is for that reason that the Government felt it right to put a limitation on the period to which the present document is related. There will be ample opportunities for us to monitor the situation as we go along.
In addition to dairy products, I mention shipbuilding, an area of more direct comparability with steel, where sectoral restrictions have been seen and understood by the House to be of advantage. On the question of not controlling restructuring, it is important to remind the House again that we are simply here relating the advances of capital under Section 18 (1)—

It being three hours after the commencement of proceedings on the Motion. Mr. DEPUTY SPEAKER put the Question, pursuant to order this day.

Resolved,

That this House takes note of EEC Document No. 4627/79 and of the Department) of Industry's memoranda dated 20th July 1979 and 18th October 1979 on State Aids for the Steel Industry.

ADJOURNMENT

Resolved,

That this House do now adjourn—[Mr Boscawen.]

Adjourned accordingly at two minutes past One o'clock.